Hi,
If parent A holds 60% of the shares in a sub (the other 40% is held by another investor B), and there is a clause allowing parent A to buy the 40% of the shares from investor B (NCI call), and also, investor B can require parent A to buy the 40% of the NCI shares. The agreement is symmetrical and both put and call co-exist.
In such a case, the NCI call coupled with a NCI put is considered as a liability for its present value of the future redemption amount, with the debit entry in other Equity.
What would be the accounting, if for example, parent A has a NCI call to buy the 40% shares, and if parent doesn't exercise it's right, then the investor B has the right to buy the 60% of the shares of the sub from parent A?
Any thoughts? Thanks