on the BS: Min Interest = (1-ownership)*(subsiduary net worth) = (1- ownership)*(assets - liabilities) on the IS min interest = (1-ownership)*(subsiduary net income) correct? 1luv
Looks right to me.
On the B/S: it is (1-%ownership) * Equity or * (Total Assets - Total Liabilities)
Related to that I always try to remember 1 other special treatment with consolidation. If you paid with cash, subtract it out of your consolidated current assets, it’s gone.
hk Wrote: ------------------------------------------------------- > Related to that I always try to remember 1 other > special treatment with consolidation. If you paid > with cash, subtract it out of your consolidated > current assets, it’s gone. Its real helpful that the only example Schweser gives where the company is paying cash is in the consolidated method. So where does the cash go if you acquire less than 50% and use the equity method? Shouldn’t it also go to the shareholders for payment as it does in the consolidated method, at least in the investment year?
On the BS, you also have to differentiate b/w beginning minority interest and ending minority interest. Beginning would be what’s written above, and ending would be: Beginning Minority Interest in the BS + Income Statement Minority Interest - Minority Interest dividend payment
nattyg Wrote: ------------------------------------------------------- > On the BS, you also have to differentiate b/w > beginning minority interest and ending minority > interest. Beginning would be what’s written > above, and ending would be: Beginning Minority > Interest in the BS + Income Statement Minority > Interest - Minority Interest dividend payment not sure about that. what if they have foreign subsidiaries. then CTA might effect equity but not IS.
The minority interest is for consolidation method only. When using consolidation, you subtract all intercompany transfers (such as cash purchases)
maratikus Wrote: ------------------------------------------------------- > nattyg Wrote: > -------------------------------------------------- > ----- > > On the BS, you also have to differentiate b/w > > beginning minority interest and ending minority > > interest. Beginning would be what’s written > > above, and ending would be: Beginning Minority > > Interest in the BS + Income Statement Minority > > Interest - Minority Interest dividend payment > > not sure about that. what if they have foreign > subsidiaries. then CTA might effect equity but > not IS. I’m not sure what you mean, maratikus. I believe I came accross this calculation of ending period in a practice exam. Will look into it later today.