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Tuesday, February 1, 2011

Consolidated Financial statements/non-controlling interest consolidation of income

Solution is available here for U$0.25
In computing the non-controlling interest's share of consolidated net income, how should the subsidiary's income be adjusted from intercompany transfers? 

a) the subsidiary's reported income is adjusted for the impact of upstream transfers prior to computing the noncontrolling interest's allocation. 
b) the subsidiary's reported income is adjusted for the impact of all transfers prior to computing the noncontrolling interest's allocation. 

c) the subsidiary's reported income is not adjusted for the impact of transfers prior to computing the non-controlling interest's allocation. 
d) the subsidiary's reported income is adjusted for the impact of downstream transfers prior to computing the interest's allocation.

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