If a company purchases a 50% stake in company with cash, does not have control and uses the equity method; then do they record noncontrolling interest under equity in the balance sheet?
I didn’t think they did but according to question #36 on the 2010 mock exam they do.
Any ideas?
i thought non controlling was only used for when you consolidate financials using acquisition method…
i don’t have the question, but that is my understanding. equity method just calls for a one liner in n.i and b.s.
Even I think, noncontrolling interest is not accounted for under Equity method…
There must be some fine lines in the questions. Theoritically, it doesn’t make any sense to have non controlling interest under equity method unless you want to be creative and put two account on the statements, combined and non controlling equity.
Either that or a change in the accounting since 2009 (when the material was probably written)