Non Controlling Interest

Under what conditions will a bargain purchase gain be recognized by a parent?

When, at acquisition, the fair value of subsidiary's identifiable net assets is greater than the investment value to acquire those net assets. Investment value is the parent's investment cost plus the fair value of any noncontrolling interest in the subsidiary.

When a parent uses the equity method to carry on its books an investment in a subsidiary that it will consolidate, what entries does the parent make on its books related to the subsidiary?

Adjusts on its books the carrying value of its investment in the subsidiary to reflect: -The parent's share of the subsidiary's income or loss. -The parent's share of dividends declared by the subsidiary. -The amortization/depreciation of the difference between the fair market value of identifiable assets (but not goodwill) and the book value of those assets.

How does the noncontrolling interests in a subsidiary's income/loss and assets/liabilities get reported in consolidated financial statements?

Noncontrolling interest in a subsidiary's net income or net loss gets reported as a separate line item in the consolidated income statement; the consolidated income/loss is allocated between the parent and the noncontrolling interest. Noncontrolling interest in a subsidiary's assets and liabilities gets reported as a separate line item in shareholders' equity in the consolidated balance sheet.

What is the effect on consolidated values when the fair values of a subsidiary's identifiable assets are less than the subsidiary's book values for those assets at the date of a business combination?

On the consolidating worksheet: -The identifiable assets are written down to fair value at the date of the business combination. -Any depreciation/amortization expense on those assets taken by the subsidiary will be reduced on the consolidating worksheet to an amount based on the lower fair values.