Question: Based on FASB ASC Topic 810 on consolidation, answer the following questions: 1). Explain what are protective noncontrolling rights, and what are substantive participating noncontrolling

Based on FASB ASC Topic 810 on consolidation, answer the following questions:

1). Explain what are protective noncontrolling rights, and what are substantive participating noncontrolling rights.

2) what noncontrolling rights overcome the presumption that all majority-owned investees should be consolidated?

3). P Company purchases 70% of the voting rights of S company with the remaining 30% noncontrolling interest held by S' former owners, who negotiated the following noncontrolling rights: a). Any new debt above $1 million must be approved by the 30% noncontroling shareholders. b). any dividends or other cash distributions to owners in excess of customary historical amounts must be approved by the 30% noncontrolling shareholders. According to the FASB ASC, what are the issues in determining whether P should consolidate A or report the investment under the equity method?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

In Chapter 1, we have learned that consolidated financial statements need to be prepared when one organization has a controlling financial interest in another organization. Control generally means...

we have learned that consolidated financial statements need to be prepared when one organization has a controlling financial interest in another organization. Control generally means with a majority...

Based on what we have learned in Chapter 1 and in prior accounting classes, plus searching the FASB ASC Topic 810 on consolidation, answer the following questions: 1). Explain what are protective...

Consolidated financial reporting is appropriate when one entity has a controlling financial interest in another entity. The usual condition for a controlling financial interest is ownership of a...

A Case Study of Financial Reporting Issues Qing L. Burke Tim V. Eaton Miami University Alibaba Group Initial Public Offering: A Case Study of Financial Reporting Issues ABSTRACT: In September 2014,...

What are protective noncontrolling rights? What are substantive participating noncontrolling rights? What noncontrolling rights overcome the presumption that all majority-owned investees should be...

Suppose that the correct model for estimating a given relationship is: E[Y|D, X] = Bo + B1 Di + BX; + VD However, instead of estimating the above regression, we estimate the model below: E[Y|D] = bo...

Record the following transactions on the books of Franklin College, a private college. All of the transactions are for the year 2015. (a) The College received $315,000 in funds that were pledged in...

Think about your own experiences: how have you personally interacted with HR in the past (e.g., onboarding, payroll, training, conflict resolution)? What impression did that give you of HR's role

Identify each of the earnings items as primarily permanent or transitory in nature. Item Permanent or Transitory? Selling expenses______________________________ Sales salaries...

Match the explanation with the advantages and disadvantages of the income statements. Item Advantage/ Disadvantage 1. Evaluates past performance. a. The sale of a specialized piece of equipment is...

Houseco, an audit client of Jones, CPA, for the past five years, is a manufacturer of various household products. Approximately four years ago, Houseco developed a better toaster than had been...

Holiday Brands issued $30 million of 6%, 30-year bonds for $27.5 million. What is the amount of interest that Holiday will pay semiannually to bondholders?

Match the explanation with the advantages and disadvantages of the income statements. Advantage/ Disadvantage Description 1. Can be manipulated and managed. a. The income statements provide...

Question 6 (6 points) The Flying Saucer Company owns a large commercial building that they lease to Total Corp. Total Corp. then sublets the space to a tenant. In this case, Ted Wear Ltd is the...

2. Find five metaphors for communication.

5. Starting with a motive you may have for acting the way you do in a particular situation: a) What purpose did you seek to achieve? b) Which aspects of your past and your surroundings influenced...

3. (Constructing a metaphor about something can be done by comparing it to something else by using the word is. For instance, Communication is a bridge between people.