Asked by Potenza Building Mtrl on May 17, 2024
Verified
Why does AASB 3 allow a choice in the measurement of NCI at the date of acquisition?
AASB 3
Refers to the Australian Accounting Standards Board's standard on Business Combinations, outlining requirements for the accounting treatment of mergers and acquisitions.
Measurement of NCI
The process of determining the value of non-controlling interests in a subsidiary, which are not owned by the parent company.
Date of Acquisition
The specific date on which control of assets and liabilities transfers from one entity to another in a business combination.
- Understand the importance of the fair value method and the proportionate interest method in measuring non-controlling interest.
Verified Answer
DA
Danika AlbertMay 17, 2024
Final Answer :
Measurement of NCI at date of acquisition:
- Measurement of NCI at date of acquisition can be by either the fair value (100% goodwill)method or the proportionate interest goodwill method.
- This represents a change from previous regulatory requirements that required only the parent entity interest in goodwill to be recognised,and therefore appeared to represent a proprietary concept of consolidation.
- Measurement of NCI at date of acquisition can be by either the fair value (100% goodwill)method or the proportionate interest goodwill method.
- This represents a change from previous regulatory requirements that required only the parent entity interest in goodwill to be recognised,and therefore appeared to represent a proprietary concept of consolidation.
Learning Objectives
- Understand the importance of the fair value method and the proportionate interest method in measuring non-controlling interest.