When accounting for the acquisition of a non-wholly owned subsidiary, the par ent can use entity theory
Question:
(a) Which theory of consolidation is used to value non-controlling interest at the date of acquisition?
(b) What portion of the additions to property, plant, and equipment during the year came from business combinations, and what portion came from direct purchases?
(c) What percentage of shareholders' equity at the end of the year pertains to non-controlling interests?
(d) How were costs directly attributable to the business combination accounted for?
(e) Were any of the subsidiaries controlled, even though the percentage own ership was equal to or less than 50%? If so, what explanation was provided to explain how control was achieved with ownership of 50% or less?
(f) Assume that the company used the other acceptable theory of consolida tion for valuing non-controlling interest and that the fair value of the sub sidiary as a whole was greater than the fair value of the identifiable net assets at the date of acquisition. How would this change in theory affect the debt-to-equity ratio at the date of acquisition?
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Related Book For
Modern Advanced Accounting In Canada
ISBN: 9781259066481
7th Edition
Authors: Hilton Murray, Herauf Darrell
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