Asked by Deina Pavon on Jul 16, 2024
Verified
In a multiple subsidiary structure, the direct non-controlling interest is entitled to a proportionate share of:
A) pre-acquisition equity only.
B) post-acquisition amounts of equity only.
C) pre- and post-acquisition amounts of equity.
D) post-acquisition balance of retained earnings only.
Direct Non-Controlling Interest
An ownership interest in a company where the shareholder does not have enough shares to control the company directly, but still holds a significant amount of shares.
Post-Acquisition Equity
The equity interest in a subsidiary acquired by a parent company after the initial purchase date, affecting the parent's total equity interest in the subsidiary.
Pre-Acquisition Equity
The equity interest in a company before any acquisitions, typically involving the original shares and retained earnings before new investments.
- Differentiate pre-acquisition from post-acquisition equity regarding non-controlling interests.
Verified Answer
Learning Objectives
- Differentiate pre-acquisition from post-acquisition equity regarding non-controlling interests.
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