You are now finalising the consolidated financial statements in the annual report for JKY Ltd
Part C
You are now finalising the consolidated financial statements in the annual report for JKY Ltd as at 30 June 20X8. AASB 127 requires that the NCI is reported as a separate item of owner’s equity. As part of the preparation, you must also consider the allocation of other comprehensive profit to the NCI. The Financial Accountant responsible for the subsidiary has already informed you that the assets of the subsidiary were recorded at historic cost at the control date.
What changes may be required to ensure that the consolidated financial statements are correctly stated? How would any required changes affect the disclosure requirements in the annual report?
With reference to AASB 127 Consolidated and Separate Financial Statements and AASB 101 Presentation of Financial Statements, discuss the effects of the NCI disclosure requirement as a separate item in the consolidation process.
Hint
Accounts & Finance "Acquisition Methods:When an acquirer buys another company and uses GAAP, it has to record the event using the acquisition method and the approach mandates a series of steps to record the acquisitions, like:1) Measuring any tangible assets and liabilities that were acquired2) Measuring any in-tangible assets and liabilities that were acquired3) Measuring the amount of a...
When an acquirer buys another company and uses GAAP, it has to record the event using the acquisition method and the approach mandates a series of steps to record the acquisitions, like:
1) Measuring any tangible assets and liabilities that were acquired
2) Measuring any in-tangible assets and liabilities that were acquired
3) Measuring the amount of any non-controlling interest in the acquired business
4) Measuring the amount of consideration paid to the seller
5) Measuring any goodwill or gain on the transaction
Intra-group transactions:
These are commercial or financial transactions that involves two companies of the same group simultaneously i.e. an inter-company transaction occurs when one unit of an entity is involved in a transaction with other unit of the same entity. Now, while these transaction can occur for a variety of reason, they often occur as a result of the normal business relationship that exist between the units of the entity (these unity may be the parent and subsidiary, two division, two subsidiaries, or two department or one entity)."
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