ACCA Applied Knowledge · Financial Accounting · Subsidiaries
Alpha acquired 80% of the equity shares of Beta. In Alpha's consolidated statement of financial position, how is the portion of Beta's net assets not owned by Alpha presented?
Non-controlling interest is presented within equity in the consolidated statement of financial position, because it represents the outside shareholders' ownership share of the subsidiary's net assets. It is not a liability of the group, and it is not deducted from goodwill.
- AAs non-controlling interest within equityCorrect
- BAs a non-current liability
- CAs a deduction from goodwill
- DAs a current liability
Explanation
Under IFRS 10, the consolidated statement includes 100% of the subsidiary's assets and liabilities. The share of net assets belonging to other shareholders is shown as non-controlling interest within equity, not as a liability. Treating it as a liability is wrong because it is an ownership interest.
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