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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?

The problem comes from the share capital. There are plenty of examples on the internet...

you've zoomed in too much, start with consolidating all assets and liabilities and see where this takes you

Hi Marek, we only need to eliminate the equity components of the subsidiary, right? If I include the asset and liability of the sub into the picture, what difference does it make?

How about below, is that correct?

DR Equity of SmallCorp $100
CR investment in smallcorp $100
CR NCI $41
DR Goodwill $41

JBHF wrote: ↑01 Aug 2023, 00:37 If I include the asset and liability of the sub into the picture, what difference does it make?

It'll help you see the big picture and better understand NCI