Noncontrolling Interest Consolidation

theory is founded on the proposition that the subsidiary and the subsidiary accounts cannot be divided.

Entity

Which of the following is true of the economic entity concept?

It provides the best picture of the assets and liabilities that are now under the control of the parent.

Which of the following indicates theoretical positions on noncontrolling interest?

The main debate is based on whether the parent's cost or the implied value of the subsidiary should be the valuation basis for subsequent consolidation figures. It is actually concerned with the fundamental objectives of the consolidated financial statements.

Which of the following can be said of proportionate Consolidation Concept?

The proportion of every account's fair market value on the acquisition date is the basis for consolidation data. Using the proportionate consolidation method, values applied for consolidation reflect the parent's payment recognized for each asset and liability.

Which of the following can be said of the parent company concept?

There are two fundamental assertions with this method. Both contentions appear to have value; however, they lead to the creation of fundamentally dissimilar consolidated financial statements.

Which of the following can be said of a noncontrolling interest consolidation?

Three theories, as outlined by the Financial Accounting Standards Board (FASB), are used in these cases. The positions used today developed over the years.

unit theory combines all totals except for the noncontrolling interest figure.

economic

noncontrolling interest numbers that are indicated in the consolidation process. Calculating each is done by multiplying the percentage of outside ownership by the subsidiary's book value.

four

The parent company method is often considered a(n)

hybrid

The proportionate consolidation concept postulates that the definitive goal of the consolidated financial statements is to report to the

stockholders