Which of the following statements is incorrect,assuming that the partial goodwill method is used?
A)the subsidiary's operating profit and retained earnings are not adjusted for goodwill impairment losses when calculating non- controlling interest
B)the indirect non- controlling interest (INCI)is not given a share of share capital because it does not own shares in the entity where the INCI is located
C)the DNCI must only be given a share of pre- acquisition equity
D)the direct non- controlling interest (DNCI)must be given a share of both pre- and post- acquisition equity

Question

Quizplus · Accepted Answer

The statement "the DNCI must only be given a share of pre-acquisition equity" is incorrect. Under the partial goodwill method, both the direct and indirect non-controlling interests are given a share of post-acquisition equity, which includes any adjustments made to the subsidiary's operating profit and retained earnings, including goodwill impairment losses.

Which of the Following Statements Is Incorrect,assuming That the Partial