Beruflich Dokumente
Kultur Dokumente
197
Appendix A
Exhibit 1
Illustrations on reporting of non-controlling interest in consolidated
nancial statements under parent company theory and economic unit
theory:
$
50
(17)
33
Non-controlling interest
Prot for the year
Entity Theory
$
50
(17)
$33
(8)
$27
25
Attributable to:
Shareholders of the parent
Non-controlling interest
25
27
8
$33
$
Capital and reserves
Share capital
Reserves
Retained earnings
100
20
90
Total equity
210
Mezzanine
Non-controlling interest
Total liabilities
Total equity and liabilities
15
75
$300
$
Capital and reserves
Share capital
Reserves
Retained earnings
100
20
90
Equity attributable to
shareholders of the parent
Non-controlling interest
210
Total equity
225
Total liabilities
75
15
$300
198
Exhibit 2
Illustrations on measurement of goodwill in consolidated nancial
statements under parent company theory and economic unit theory:
Table A2. Background Information: Parent Ltd Purchases 80% of Subsid
Ltds Common Shares for $500,000 When Subsids Net Assets Have a Fair
Value of $400,000
At acquisition
Purchase price of 80%
interest in Subsid
Implied/imputed value of 100%
interest ($500,000/80%)
Fair value of net assets of subsidiary
80% of fair value of Subsids
net assets ($400,000 80%)
Goodwill
Panel A: Parent
company theory
Panel B: Economic
unit theory
$
500,000
$
625,000
400,000
320,000
$180,000
500000(100/80
)
$225,000
($45,000 of $225,000 to
allocate to noncontrolling interest)
$180,000
$225,000
to include $45,000 being
goodwill allocated to noncontrolling interest
Stella So: Department of Accountancy and Law, Hong Kong Baptist University, Kowloon Tong, Hong
Kong, e-mail: stellaso@hkbu.edu.hk
Malcolm Smith: School of Accounting, Finance & Economics, Edith Cowan University, 270
Joondalup Drive,
Joondalup, WA 6027, Australia, e-mail: Malcolm.smith@ecu.edu.au