So far our discussion and focus has been on business combinations where 100% of another company has
Question:
So far our discussion and focus has been on business combinations where 100% of another company has been acquired. In reality, complete ownership does not always take place. When a company does not acquire 100%, there is a non controlling interest (NCI) is held by another entity involved. The NCI can pose several reporting issues for accountants such as how to value the subsidiary’s accounts at consolidation and how to account for the NCI.
SFAS 160 is a new FASB requirement related to consolidations involving a non controlling interest. Discuss how SFAS 160 changed the treatment of non controlling interest in business combinations. Also, in your opinion, which treatment of noncontrolling interest presents the most conservative approach and why.
Step by Step Answer:
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta