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Remember, profit for the year and TCI for the year must be split between the group and the non-controlling
interest. The following proforma will help you to calculate the profit and TCI attributable to the non-
controlling interest.
Profit TCI
$000 $000
Profit/TCI of the subsidiary for the year (pro-rated for mid- X X
year acquisition)
PURP (if S is the seller) (X) (X)
Excess depreciation/amortization (X) (X)
Goodwill impairment (under FV model only) (X) (X)
––– –––
× NCI % X X
––– –––
Profit/TCI attributable to the NCI X X
––– –––
03. Associates
Definitions
An associate is defined as 'an entity over which the investor has significant influence and which is neither
a subsidiary nor a joint venture of the investor' (IAS 28, para 3).
Significant influence is the power to participate in, but not control, the financial and operating policy
decisions of an entity. IAS 28 states that:
• Significant influence is usually evidenced by representation on the board of directors, which allows the
investing entity to participate in policy decisions.
• A holding between 20% and 50% of the voting power is presumed to give significant influence, unless
it can be clearly demonstrated that this is not the case.
• It is presumed that a holding of less than 20% does not give significant influence, unless such influence
can be clearly demonstrated.
The investment in the associate is shown in the non-current assets section of the consolidated statement of
financial position.