Page 299 - SBR Integrated Workbook STUDENT S18-J19

Change in a group structure

Control-to-control scenarios

3.1 Share purchases

Some share purchases simply increase the parent’s holding in a subsidiary.

80% of 85% of
shares shares

In such instances, there is no change in control status. This means that:

 Goodwill is not recalculated

 A profit or loss does not arise on the transaction in the consolidated financial
statements.

The transaction is accounted for in equity, as a decrease in the non-controlling
interest. The entry in the consolidated financial statements is:

Dr Non-controlling interest X

Cr Cash X

Cr/Dr Other components of equity X (bal. fig.)

The decrease in NCI is calculated as the proportionate reduction in its carrying
amount at the date of the group's additional purchase of shares.

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