Consolidated statement of financial position - part 2

In this lesson

1. 0:00 Goodwill calculation on acquisition
2. 0:58 Understanding noncontrolling interest basics
3. 3:59 Calculating NCI value at year end
4. 6:08 Group reserves and ownership percentages
5. 9:01 Splitting subsidiary profits between groups

About this lesson

You'll work through the goodwill calculation first—understanding that goodwill is simply the cost of acquisition minus the net assets acquired, and that it only arises when you own 51% or more of a subsidiary. You'll then explore noncontrolling interest (NCI), which represents the portion of a subsidiary owned by external parties. The key is calculating the NCI value at year-end by taking its value at acquisition and adding the NCI's share of post-acquisition profits. Finally, you'll learn how group reserves are built: 100% of the parent's reserves plus only the parent's ownership percentage of the subsidiary's post-acquisition profits, ensuring that the minority shareholders' share is excluded from group reserves and accounted for separately as NCI. This content covers the essential mechanics you need for Strategic Business Reporting (SBR) and Advanced Financial Reporting (AFM), where consolidated statements are a core activity. The worked examples show realistic scenarios—from straightforward 100% acquisitions to more complex partial acquisitions—so you can apply these techniques confidently in your exam.

Duration: 10m