HRN Enterprises Inc. (HRN) purchases 80% of the outstanding voting shares of NHR Inc. on January 1, 2018. HRN is using the fair value enterprise (FVE) consolidation method. On that date, which of the following statements pertaining to the non-controlling interest (NCI) is TRUE?
A) HRN's non-controlling interest (NCI) account will include 20% of the book value of NHR's net assets, 20% of the fair value excess and 20% of the goodwill.
B) HRN's non-controlling interest (NCI) account will include 20% of the book value of NHR's net assets.
C) HRN's non-controlling interest (NCI) account will include 20% of the acquisition differential on the date of acquisition.
D) HRN's non-controlling interest (NCI) account will include 20% of the book value of NHR's net assets and 20% of the fair value excess.
Correct Answer:
Verified
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