Non-Controlling Interests in Consolidated Financial Statements: Regulation and Calculation Issues
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School of Business |
Bachelor's thesis
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Authors
Date
2023
Department
Major/Subject
Mcode
Degree programme
Laskentatoimi
Language
en
Pages
20 + 5
Series
Abstract
Non-controlling interests are part of Consolidated Financial Statements. Depending on the company structure, non-controlling interests are not the most looked for figure. However, they are mandatory in certain situations. Despite the seemingly simple calculation for non-controlling interests, factors such as fluctuating ownership percentages and currency translation may cause problems for accountants. The aim of this Thesis is to enlighten how non-controlling interests are calculated and regulated. This will be done by reviewing studies conducted in this area and IFRS standards. This Thesis will also include an empirical study on the calculation of non-controlling interest in a Finnish case company. The aim is to examine what factors cause problems in non-controlling interest calculations and are they avoidable or fixable. The empirical study will be conducted using non-public data and calculation templates. Key findings show that non-controlling interests are not widely researched. The regulations are generally straightforward apart from call and put options with minority shareholders. The empirical study shows that ownership percentages are the key issue with non-controlling interest calculation. Furthermore, contractual agreements and recently acquired subsidiaries can cause issues if the calculation process is automated.Description
Thesis advisor
Pham, LyKeywords
non-controlling interest, IFRS, CPM beacon, Dividends attributable to non-controlling interest