Step 1: Analysis of group structure The group structure is analyzed as follows: P’s ownership interest in S1 80% S1’s ownershi

p interest in S1 80% S1’s ownership interest in S2 60% P, S1 and S2 all belong to a vertical group. The controlling interest and NCI percenta
ntrolling interest and NCI percentages are calculated as follows: Ownership over S1 Direct holdings of P in S1 80% NCI in S1 (squeeze) 20%
n S1 80% NCI in S1 (squeeze) 20% Total 100% Ownership over S2 Direct holdings of P in S2 0% Indirect holdings of P in S2 (80% x 60%)* 48
oldings of P in S2 (80% x 60%)* 48% Total holdings of P in S2 48% NCI in S2 (squeeze) 52% Total 100% *The indirect holdings of P in S2 is c
The indirect holdings of P in S2 is computed by multiplying P’s interest in S1 (80%) by S1’s interest in S2 (60%). Although the computed tot
60%). Although the computed total holdings of P is only 48%, i.e., less than 50%, it is still presumed that there is control because P contro
there is control because P controls S1, who in turn controls S2. In substance, it is actually P who has control over S2. This is not unusual in
ntrol over S2. This is not unusual in practice. The computation is made only for purposes of mathematical computations during consolidat
al computations during consolidation procedures. The NCI in S2 is reconciled as follows: I