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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
|
|
1Elimination of the carrying value of the 40% NCI on Company A’s books.
2Fair value of the consideration paid less the carrying value of NCI ($300 – $260)
|
Dr. Cash
|
$200
|
|
Cr. NCI
|
$120 1
|
|
Cr. Equity/APIC
|
$80 2
|
|
1Recognition of the 20% NCI at its proportionate interest in the carrying value of the subsidiary ($600 × 20%)
2Fair value of the consideration received less the carrying value of the NCI ($200 – ($600 × 20%))
|
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
|
190 shares divided by 100 shares outstanding
290 shares divided by 120 shares outstanding
3Subsidiary Z’s net equity × 90%
4Subsidiary Z’s net equity × 75%
|
Dr. Cash
|
$200
|
|
Cr. Equity/APIC
|
$88 1
|
|
Cr. NCI
|
$112 2
|
|
1Company A’s share of the fair value of the consideration received ($200 × 75%) less the change in Company A’s basis in Subsidiary Z ($411 × (90% – 75%))
2The change in the recorded amount of NCI represents:
|
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
|
1Company 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
|
2Warrant 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
|
1Company 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
|
2Subsidiary’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
|
$235 1
|
1The change in ownership interest is calculated in accordance with ASC 810-10-45-23 as follows:
|
|||
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
|
$12 4
|
|
Cr. Cash
|
$35 2
|
|
Cr. AOCI
|
$2 3
|
|
1Elimination of the carrying value of the 10% of NCI acquired ($50 × 50%).
2Consideration paid.
3Reallocation of the AOCI previously attributable to the NCI holder to Company A ($4 x 50%).
4Adjustment to equity/APIC = Consideration paid ($35) less the change in the carrying value of NCI ($25), plus the reallocation of AOCI ($2) = $35 - $25 + $2 = $12.
|
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
|
|
1CTA attributable to branch X
2Carrying amount of disposal group of assets that constitutes a business, exclusive of CTA
3Sum of the gain on disposal of the group assets ($24 – $20 = $4) and the portion of CTA released into earnings ($2).
|
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
|
|
1Elimination of the carrying value of the 10% NCI on Company A’s books
2Consideration paid for the NCI less the carrying value of NCI ($100 – $70)
|
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