In December 2024, Halloran Ltd acquired 60% of the issued shares of Greenway Ltd.
The accountant for Halloran Ltd, Mary Bryant, is concerned about the approach she should take in preparing the consolidated financial statements for the newly established group. In particular, she is concerned about the calculation of the NCI share of equity, particularly in the years after acquisition date. She has heard accountants in other companies talking about a ‘step’ approach, and in particular how this makes accounting in periods after the acquisition date very easy.
Required Prepare a report for Mary, explaining the step approach for the calculation of NCI and the effects of this approach in the years after acquisition date.