If you’d like to revise a theory first, then please read my summary of IFRS 3 Business Combinations and IFRS 10 Consolidated Financial Statements, both of them contain video in the end.
Here’s the question: Mommy Corp has owned 80% shares of Baby Ltd since Baby’s incorporation.
So, when holding company shows consolidated balance sheet, it is the duty of accountant to show minority interest in the liability side of consolidated balance sheet.
9th Step Treatment of Dividends If holding company gets the dividends from subsidiary company, then this will divide into two parts.
If subsidiary company declare dividend out of capital profits, then this will add in capital reserves in consolidated balance sheet.
I’ll do it on a case study, with explaining what I do and why.
If you don’t like reading, you can skip to the end of this article and watch my video.
Below there are statements of financial positions of both Mommy and Baby at 31 December 20X4.