NCI in the ledger
Posted: 31 Jul 2023, 16:38
Hi Everyone
I have a question about elimination entry when involving non-controlling interest. I just want to verify my understanding about the booking model.
My company invested fund into a start-up (let's call it smallcorp) and it acquires 51% of the company share. Let's say the amount invested is $100 (in cash).
I understand that, I need to eliminate the equity of smallcorp, and because the ownership is 51%, then below entries reflect the flow.
Initial recognition:
From parent
DR Investment in Smallcorp $100
CR cash $100
From smallcorp
DR cash $100
CR share capital $100
From elimination entity (notional entity set up for elimination purpose)
DR Equity of SmallCorp $100 (eliminate equity of smallcorp)
CR investment in smallcorp $100 (offset blc from patent)
.
So how do we account for the NCI? Can anyone advise the correct journal entry?
I have a question about elimination entry when involving non-controlling interest. I just want to verify my understanding about the booking model.
My company invested fund into a start-up (let's call it smallcorp) and it acquires 51% of the company share. Let's say the amount invested is $100 (in cash).
I understand that, I need to eliminate the equity of smallcorp, and because the ownership is 51%, then below entries reflect the flow.
Initial recognition:
From parent
DR Investment in Smallcorp $100
CR cash $100
From smallcorp
DR cash $100
CR share capital $100
From elimination entity (notional entity set up for elimination purpose)
DR Equity of SmallCorp $100 (eliminate equity of smallcorp)
CR investment in smallcorp $100 (offset blc from patent)
.
So how do we account for the NCI? Can anyone advise the correct journal entry?