Question
In: Accounting
Assume that there are only two shareholders in a company; the controlling shareholder holds 90% of...
Assume that there are only two shareholders in a company; the
controlling shareholder holds 90% of the equity shares of the
company whilst the other non-controlling shareholder holds the
remaining 10%. The non-controlling shareholder is reading the
consolidated financial statements of the controlling shareholder
but could not understand why:
The balance shown as non-controlling interest is different
from the amount he paid to purchase the 10% equity shares of the
company nor the market value of the shares of the company as at the
date of the financial statements.
The amount of profit attributable to non-controlling
interest is not equal to 10% of the net profit of the company for
the financial year.
Suppose you are the Group Accountant of the company. Draft a
short memorandum explaining the above to the non-controlling
shareholder to help him to understand the amounts and balances
related to non-controlling interest in the consolidated financial
statements.
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ekkarill92 answered 1 year agoRelated Solutions
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