Calculating the Non-Controlling Interest (NCI)in the Operating Profit and Opening

question 40

Multiple Choice

Calculating the non-controlling interest (NCI) in the operating profit and opening retained earnings of a subsidiary is done by:

• A) taking the operating profit and opening retained earnings figures of the subsidiary and multiplying them by the percentage ownership held by the NCI.
• B) adjusting the operating profit and opening retained earnings of the subsidiary for any intragroup transactions and multiplying them by the percentage ownership held by the NCI.
• C) adjusting the operating profit of the subsidiary for any unrealised profit or expense of the subsidiary as a result of any intragroup transactions and multiplying both this and the opening retained earnings by the percentage ownership held by the NCI.
• D) adjusting the opening retained earnings and the operating profit for any unrealised profit or expense of the subsidiary as a result of intragroup transactions and multiplying this by the percentage ownership held by the NCI.

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Definitions:

Event

An organized occasion such as a meeting, concert, or sports game, where people gather to participate in activities or discussions.

Fast-Growth Ventures

Businesses characterized by a rapid increase in revenue or size in a short amount of time, indicative of significant market demand for their products or services.

Sole Entrepreneurs

Individuals who own, operate, and are solely responsible for the management and risks of their business.

Financial Backing

Financial backing refers to monetary support provided by investors or sponsors to fund a project, business, or initiative.