Treatment of NCI


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Hi,

I have a question on treatment of NCI when the Parent Company buy back all the shares of the subsidiary.

Example:

As at 31.12.2018 Company P holds 98% shares in Company S. The balance 2% are held by Company N.
On 01.02.2019 Company P buy back 2% shares from Company N.

Financials for Company N
Share Capital is $1,000
Net Assets as at 31.12.2018 is $20,000
Profit for Jan 2019 is $3,000

What are the accounting entries if:
Scenario 1: Company P paid $460 for the share buy back
Scenario 2: Company P paid $1,000 for the share buy back
Scenario 3: Company P paid $300 for the share buy back

Thank you
Yuna
 
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Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary are equity transactions, i.e. without any impact on profit or loss, recognised assets (including goodwill) or liabilities (IFRS 10.23,B96).

In general the entries look as follows:
Credit: cash
Debit: NCI
Credit/Debit: retained earnings (balancing figure)
 

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