NCI Calculation Date

NCI Calculation Date

Initially NCI is calculated at acquisition date and thereafter at each reporting date NCI is calculated by the adding the after acquisition profit as proportion to NCI Shareholding. For example there is NCI of $ 100 at the acquisition date and subsidiary earn a profit of $80 then NCI at the reporting and Parent hold 80% shareholding then the NCI at reporting date will be calculated as under.

NCI at Acquisition Date	$ 100
Profit for the year (NCI proportional) 20% of 80	$  16
NCI at reporting Date	$ 116

Non controlling Interest at acquisition date (Fair value or Net Asset basis)

Add: NCI share of Subsidiary Profit

Example Non Controlling Interest Calculation reporting date

600,000 Shares acquired by Pillion & Co 01 Jan 2012
Shares of Sillion & Co	800,000
Worth of Net Asset of Silicon & Co	$ 2,500,000
Share price at acquisition	$ 3
Profit for the year	$120,000

Solution

Non Controlling Interest Calculation Reporting date (Fair value)

1.       % of Shareholding

Shares Purchased	600,000
Total Shares	800,000
Shareholding % (600,000/800,000)	75%

2.       Calculate the NCI at acquisition Date (Fair Value)

	Fair Value
Shares hold	200,000
Per Share price	$ 3
NCI is ( 200,000 x 3)	$ 600,000

3.       NCI at Reporting Date

NCI at Acquisition Date	$600,000
NCI Share in after acquisition profit ( 25% x 120,000)	$  30,000
NCI at Reporting Date (Fair Value)	$ 630,000

Non Controlling Interest Calculation Reporting date (Net Asset)

1.       % of Shareholding

Shares Purchased	600,000
Total Shares	800,000
Shareholding % (600,000/800,000)	75%

2.       Calculate the NCI at acquisition Date (Net Asset)

Net Assets of Sillion	2,500,000
NCI Shareholding ( 25%)	25%
NCI at acquisition Date	$ 625,000

3.       NCI at Reporting Date (Net Asset)

NCI at acquisition date	$ 625,000
25% after acquisition profit ( 25% x 120,000)	$   30,000
NCI at Reporting Date	$ 655,000