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    Non-controlling interest and financial statements

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    What sections of the workpaper are included for non-controlling interest? Why is the existence of non-controlling interest significant when preparing consolidated financial statements?

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    Anna Liza Gaspar

    First, the consolidating work paper is a necessary tool for the consolidated financial statements that are prepared from the separate financial statements of the parent and the subsidiary. In the working paper, the assets and liabilities of the companies are consolidated as if they are only a single entity rather than separate entities. The consolidation of financial statements is mandatory whenever a parent acquires a controlling interest in the stocks of another company.

    Second, a controlling interest means that a company directly or indirectly owns over 50 per cent of the outstanding voting shares, ...

    Solution Summary

    This solution discusses non-controlling interest and financial statements.