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The guidance in paragraphs 810-10-45-22 through 45-24 applies to the following:
Dr. Identifiable net assets |
$370 |
|
Dr. Goodwill |
$130 |
|
Cr. Cash |
$300 |
|
Cr. NCI |
$200 |
Dr. NCI |
$260 1 |
|
Dr. Equity/APIC |
$40 2 |
|
Cr. Cash |
$300 |
Dr. Cash |
$200 |
|
Cr. NCI |
$120 1 |
|
Cr. Equity/APIC |
$80 2 |
December 31 (pre-sale) |
January 1 (post-sale) |
|
Total shares outstanding—subsidiary Z |
100 shares |
120 shares |
Company A’s ownership percentage in subsidiary Z |
90% 1 |
75% 2 |
Company A’s basis in subsidiary Z |
$370 3 |
$458 4 |
Subsidiary Z’s net equity |
$411 |
$611 |
Dr. Cash |
$200 |
|
Cr. Equity/APIC |
$88 1 |
|
Cr. NCI |
$112 2 |
NCI’s share of the fair value of the consideration received ($200 × 25%) |
$50 |
Change in NCI’s basis in Subsidiary Z ($411 × 15%) |
$62 |
Additional NCI recorded |
$112 |
Dr. Cash |
$60 |
|
Cr. Noncontrolling interest |
$60 |
Dr. Cash |
$150 |
|
Cr. Noncontrolling interest |
$40 1 |
|
Cr. APIC |
$110 2 |
1 Company A’s basis in Subsidiary’s equity after exercise of warrant |
$1,000 |
Investor B’s ownership percentage |
x 10% |
Noncontrolling interest after exercise |
100 |
Less: Noncontrolling interest prior to exercise |
(60) |
Increase in noncontrolling interest |
$40 |
2 Warrant consideration received by Company A |
$60 |
Plus: Exercise price |
150 |
Total consideration received by Company A |
210 |
Less: 10% of Company A’s basis in Subsidiary’s equity |
(100) |
Change in Company A’s APIC |
$110 |
Dr. Noncontrolling interest |
$60 |
|
Cr. APIC |
$60 |
Dr. Cash |
$60 |
|
Cr. Noncontrolling interest |
$60 |
Dr. Cash |
$150 |
|
Cr. Noncontrolling interest |
$61 1 |
|
Cr. APIC |
$89 2 |
1 Company A’s basis in Subsidiary’s equity after exercise of warrant |
$1,210 |
Investor B’s ownership percentage |
x 10% |
Noncontrolling interest after exercise |
121 |
Less: Noncontrolling interest prior to exercise |
(60) |
Increase in noncontrolling interest |
$ 61 |
2 Subsidiary’s carrying amount of net assets after exercise |
$1,210 |
Company A’s ownership percentage after exercise |
x 90% |
Company A’s ownership in Subsidiary’s net assets after exercise |
1,089 |
Company A’s ownership investment in Subsidiary before exercise |
(1,000) |
Change in Company A’s ownership interest |
$ 89 |
Dr. Noncontrolling interest |
$60 |
|
Cr. APIC |
$60 |
Target fair value |
$690 |
Subsidiary A net equity |
$300 |
Subsidiary A fair value |
$810 |
Dr. Target net assets acquired |
$690 |
|
Cr. Noncontrolling interest |
$455 |
|
Cr. APIC—controlling interest |
$2351 |
NewCo equity before acquisition of Target |
$300 |
|
NewCo equity issued to acquire Target |
690 |
|
Total NewCo equity after acquisition of Target |
$990 |
|
Company A’s ownership interest in NewCo after acquisition of Target |
× 54% |
|
Company A’s investment in NewCo after acquisition of Target |
$535 |
|
Company A’s investment in NewCo before acquisition of Target |
(300) |
|
Change in Company A’s ownership interest in NewCo |
$235 |
Dr. NCI |
$25 1 |
|
Dr. Equity/APIC |
$10 2 |
|
Cr. Cash |
$35 |
Dr. Equity/APIC |
$2 3 |
|
Cr. Accumulated other comprehensive income |
$2 3 |
Dr. Cash |
$24 |
|
Dr. Accumulated other comprehensive income |
$ 2 1 |
|
Cr. Disposal group of assets |
$20 2 |
|
Cr. Gain on disposal of net assets |
$ 6 3 |
Dr. Identifiable net assets of Company C |
$900 |
|
Dr. Noncontrolling interest of Subsidiary B |
$70 1 |
|
Dr. Equity/APIC |
$30 2 |
|
Cr. Cash |
$1,000 |
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