Control to control scenarios

In this lesson

1. 0:00 Control scenarios and step acquisitions
2. 1:01 Accounting for increased shareholding
3. 3:05 Step acquisition worked example
4. 5:31 Disposal scenarios with control retained
5. 7:41 Disposal worked example

About this lesson

You'll master two key scenarios: step acquisitions (buying additional shares to increase control) and disposals (selling shares to decrease control). In both cases, the subsidiary remains consolidated in full, but the non-controlling interest adjusts based on the percentage change. The core technique is calculating the movement in NCI and recognising the difference between consideration paid or received and that NCI movement as an adjustment to consolidated equity—either increasing or decreasing retained earnings depending on whether you've made a gain or loss on the transaction. The lesson walks you through the step-by-step methodology: identifying the NCI before and after the transaction, calculating the increase or decrease in NCI using the formula (NCI × percentage change ÷ NCI percentage before), and then determining your equity adjustment. You'll see how to handle mid-year transactions by time-apportioning the NCI across different ownership percentages. Two worked examples show you exactly how these calculations work in practice, so you can confidently tackle similar questions in your exams and understand why these adjustments matter for group financial statements.

Duration: 10m