Modul ke

Akuntansi Keuangan Lanjutan II

09 Fakultas
Indirect and Mutual Holdings

Ekonomi & Bisnis

Oleh :
Program Studi Eriana Kartadjumena, Ph.D, Ak, CSRS.
S1 Akuntansi eriana.kartadjumena@widyatama.ac.id
Kepemilikan Saham Tidak Langsung

Sub Bahasan Pertama

Materi Kepemilikan Saham Tidak Langsung dan Saling Pemilikan
Saham Timbal Balik antara Induk dengan Anak Perusahaaan
menjelaskan tentang proses perolehan pengendalian dan
pengakuan alokasi pendapatan melalui kepemilikan saham tidak
langsung serta proses pencatatan pada laporan keuangan
konsolodasian terkait saling kepemilikan saham timbal balik antara
induk dengan anak perusahaan. .
1: Indirect Holdings

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Types of Indirect Holdings

Father-Son-Grandson
Connecting Affiliates

80%

40%

Parent owns 80% of A, 20% of B,

and through A an additional 32% of B
Parent owns 80% of A, and through A,
(80% x 40%).
56% of B (80% x 70%).
Parent owns a total of 52% of B.

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 Equity Method for
Father-Son-Grandson Holdings

• Son applies equity method for Investment in Grandson

• Father applies equity method for Investment in Son
• Controlling interest share of consolidated income
includes
• Share for direct holding of son
• Share for indirect holding of grandson (by father through son)

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 Example: Father-Son-Grandson
On 1/1/09 Peterpan acquires 80% of Sigma
On 1/1/10 Sigma acquires 70% of Tango.
Earnings and dividends for 2010 are below:

Peterpan Sigma Tango

Separate earnings 100 50 40
Dividends 60 30 20

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 Equity Method Entries
Sigma applies equity method (70%):
Cash 14  
Investment in Tango   14
for dividends    
Investment in Tango 28  
Income from Tango   28
for income    
Peterpan applies equity method (80%):
Cash 24  
Investment in Sigma   24
for dividends    
Investment in Sigma 62.4  
Income from Sigma   62.4
for income 80%(50+28)    

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Allocations to CI and NCI

  Peterpan Sigma Tango CI NCI Total

Separate income 100.0 50.0 40.0     190.0
Allocate:            
Tango==>
70% Sigma: 30% NCI   28.0 (40.0)   12.0  
Sigma 
80% Pe: 20% NCI 62.4 (78.0)     15.6  
Peterpan 
CI (162.4)     162.4    
Total consolidated
income       162.4 27.6 190.0

This allocation may look like the "step-down

method" allocation presented in cost accounting
texts. Mathematically it is!
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 Allocation Results
  Peterpan Sigma Tango CI NCI Total
Separate income 100.0 50.0 40.0     190.0
Allocate:            
Tango 
70% Sigma: 30% NCI   28.0 (40.0)   12.0  
Sigma 
80% Peterpan: 20% NCI 62.4 (78.0)     15.6  
Peterpan  CI (162.4)     162.4    
Total consolidated
income       162.4 27.6 190.0

On separate income statements:

• Poe's net income = $162.4
• Shaw's "Income from Turk" = $28.0
• Poe's "Income from Shaw" = $62.4
For consolidated statements:
• Noncontrolling interest share = 12.0 + 15.6 = $27.6
06/09/2021 9-1
 Indirect Holdings with
Connecting Affiliates
Indirect holdings with connecting affiliates
• Handle similar to Father-Son-Grandson, but
• Father has direct holdings in both Son and Grandson
Example: Peterpan holds 70% of Sigma and 60% of Tango
Sigma holds an additional 20% of Tango.

  Peterpan Sigma Tango

Separate income 70 35 20
Dividends 40 20 10
Intercompany profit transactions:
• Downstream: Pet sold Sigma land with a gain of $10. This will be fully attributed to
Pet.
• Upstream: Sigma sold $15 inventory to Pet, and Pet holds ending inventory with
unrealized profit of $5. This will be allocated between Pet and NCI.

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 Calculating Investment Balances

Sigma: Tango:
Underlying equity Jan 1 Dec 31 Underlying equity Jan 1 Dec 31
Capital stock 200 200 Capital stock 100 100
Retained earnings 50 69 Retained earnings 80 90
Goodwill 12 12 Goodwill 12 12
Unrealized profit in inventory (5) Total 192 202
Subtotal (split 70:30) 276 Investment in Tango (60%) 115.2 121.2
Unrealized profit on land (10) Investment in Tango (20%) 38.4 40.4
Total 262 266 Noncontrolling interest (20%) 38.4 40.4
Investment in Sal (70%) 183.4 183.2
* (70% x 276) - 10 = 183.2    
Noncontrolling interest
(30%) 78.6 82.8
* 30% x 276 = 82.8

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  Peterpan Sigma Tango CI NCI Total
Separate income 70.0 35.0 20.0     125.0
Unrealized $5 profit on inventory
(upstream) (5) (5)
Unrealized $10 gain on land
(downstream) (10) (10)
Allocate:            
Tango ==> 60% Pet: 20% Sigma:
20% NCI  12.0 4.0 (20.0)   4.0  
Sigma ==> 70% Pet: 30% NCI 23.8 (34.0)     10.2  
Pet ==> CI (95.8)     95.8    
Total consolidated income       95.8 14.2 110.0
Dividend distributions:            
Tango==> 60% Pet: 20% Sigma: 20% NCI 6 2 (10)   2  
Sigma ==> 70% Pet: 30% NCI 14 (20)     6  
Pet ==> CI (40)     40    

Sigma's Income from Tango = $4.0

Pet's Income from Tango = $12.0
Pet's Income from Sigma = $23.8 - $10 unrealized gain = $13.8
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 Sales 15.0  
Cost of sales   15.0
Cost of salesWorksheet Entries5.0  
Inventory   5.0
Gain on sale of land 10.0  
Land   10.0
Income from Tango 16.0  
Dividends   8.0
Investment in Tango   8.0
both Sigma's and Pet's    
Noncontrolling interest share (Tango) 4.0  
Dividends   2.0
Noncontrolling interest (Tango)   2.0

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 Income from Sigma 13.8  
Investment in Sigma 0.2  
Dividends   14.0
including 10 unrealized gain on land    
Noncontrolling interest share (Sigma) 10.2  
Dividends   6.0
Noncontrolling interest (Sigma)   4.2
Capital stock (Tango) 100.0  
Retained earnings (Tango) 80.0  
Goodwill 12.0  
Investment in Tango (Sigma & Pet)   153.6
Noncontrolling interest (Tango)   38.4
Capital stock (Sigma) 200.0  
Retained earnings (Sigma) 50.0  
Goodwill 12.0  
Investment in Sigma   183.4
Noncontrolling interest (Sigma)   78.6

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 Consolidation Worksheet
Income statement: Pet Sigma Tango DR CR Consol
Sales 200.0 150.0 100.0 15.0   435.0
Income from Sigma 13.8     13.8   0.0
Income from Tango 12.0 4.0   16.0   0.0
Gain on land 10.0     10.0   0.0
Cost of sales (100.0) (80.0) (50.0) 5.0 15.0 (220.0)
Other expenses (40.0) (35.0) (30.0)     (105.0)
Noncontrolling interest 10.2  
share       4.0   14.2
Controlling interest
share 95.8 39.0 20.0 95.8

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Statement of retained
earnings: Pet Sigma Tango DR CR Consol
Beginning retained 80.0
earnings 223.0 50.0 80.0 50.0   223.0 
Add net income 95.8 39.0 20.0     95.8
Deduct dividends (40.0) (20.0) (10.0) 8.0
2.0
14.0
  6.0  (40.0)
Ending retained earnings 278.8 69.0 90.0 278.8
Balance sheet: Pet Sigma Tango DR CR Consol
Other assets 50.6 19.6 85.0     155.2
Inventories 50.0 40.0 15.0   5.0 100.0
Plant assets, net 400.0 200.0 100.0   10.0 690.0
Investment in Sigma (70%) 183.2     0.2 183.4 0.0
Investment in Tango (60%, 121.2 40.4 8.0
20%)     153.6 0.0 
Goodwill 12.0
      12.0    24.0
Total 805.0 300.0 200.0 969.2

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   Pet Sigma Tango DR CR Consol
Liabilities 126.2 31.0 10.0     167.2
Capital stock 400.0 200.0 100.0 100.0
200.0    
Retained earnings 278.8 69.0 90.0     278.8
Noncontrolling 2.0
interest 4.2
38.4
        78.6 123.2 
Total 805.0 300.0 200.0 969.2

06/09/2021 9-1
2: Mutual Holdings

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Types of Mutual Holdings
Connecting Affiliates
Parent Mutually Owned
Mutually Owned

80%

40%
Parent owns 80% of A, Parent owns 80% of A, 20% of B,
and through A, through A an additional
has 8% (80% x 10%) of 32% (80% x 40%) of B, and through B an additional 4%
(20% x 20%) of A.
its own (treasury) stock.
(P has control to A = 80% + 4%= 84%)
(P has control to B = 20%+ 32% = 52%)

9-1 06/09/2021
 Treasury Stock or Conventional
Treasury stock method
• Treats parent mutually held stock as treasury stock
• Parent has fewer shares outstanding
• "Interdependency" assumed eliminated by treasury stock
treatment
Conventional method for mutual holding
• Treats stock as retired
• Parent has fewer shares outstanding
• Simultaneous set of equations
• Fully recognizes interdependencies

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 Parent Stock Mutually Held
One or more affiliates holds parent company stock
• Treasury stock method
• Recognize treasury stock at cost of subsidiary's investment in
parent
• Reduce Investment in subsidiary
• Conventional method
• Parent treats stock as retired, reducing common stock, and
additional paid in capital or retained earnings
• Reduce Investment in subsidiary

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 Comparison
• Both methods reduce
• Income from Subsidiary for the
• Parent dividends paid to subsidiary
• Methods result in different
• Equity accounts
• Treasury stock
• Retired common stock
• Consolidated retained earnings
• Noncontrolling interest

06/09/2021 9-1
 Treasury Stock Method - Data

Peterpan owns 90% of Sigma acquired at fair value equal to

cost, no goodwill.
Sigma owns 10% of Peterpan. At the start of 2010:
• Investment in Sigma, $297
• Noncontrolling interest, $33
• Sigma's total stockholders' equity
• Common stock $200
• Retained earnings $130
During 2010,
• Separate income: Peterpan $60, Sigma $40
• Dividends: Peterpan $30, Sigma $20
06/09/2021 9-1
 Peterpan Uses Treasury Stock Method

Allocations of income to CI and NCI:

  Peter Sigma CI NCI Total
Separate Income 60.0 40.0     100.0
Parent dividends (3.0) 3.0      
Allocate:          
Sigma => 90%:10% 38.7 (43.0)   4.3  
Peterpan => 100% 95.7   95.7    
Totals     95.7 4.3 100.0

• Controlling interest share $95.7

• Noncontrolling interest share $4.3
• Pace's Income from Sigma $38.7 – 3.0 = $35.7
06/09/2021 9-1
 Peterpan's Equity Method Entries
Cash 18.0  
Investment in Sigma   18.0
for dividends    
Investment in Sigma 38.7  
Income from Sigma   38.7
for income    
Income from Sigma 3.0  
Dividends   3.0
for Peterpan dividends paid to Sigma
In place of the last entry, the Peterpan could record its dividend directly as:
Dividends 27.0  
Income from Sigma 3.0  
Cash   30.0
06/09/2021 9-1
 Worksheet Entries

Income from Salt 35.7  

Dividends   18.0
Investment in Salt   17.7
Noncontrolling interest share 4.3  
Dividends   2.0
Noncontrolling interest   2.3
Common stock 200.0  
Retained earnings 130.0  
Investment in Salt   297.0
Noncontrolling interests   33.0
Treasury stock 70.0  
Investment in Pace   70.0

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 Parent Mutually Held - Data
Peterpan owns 90% of Sigma acquired at fair value equal to cost, no goodwill.
Sigma owns 10% of Peterpan. At the start of 2010:
Investment and
• Investment in Sigma, $226,154 noncontrolling interest
• Noncontrolling interest, $33,846 = 226,154 + 33,846
• Sigma's total stockholders' equity
equals underlying equity
• Common stock $200,000 less mutual holding
• Retained earnings $130,000
= 200,000 + 100,000 –
During 2010, 70,000.
• Separate income: Peterpan $60,000, Sigma $40,000
• Dividends: Peterpan $30,000, Sigma $20,000

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 Pace2 Uses Conventional Method
Allocation information:
  Peterpan Sigma CI NCI Total
Separate Income $60,000 $40,000     $100,000
Sigmas allocation .90S .10S
Peterpans allocation .10P .90P

Solved, substituting 2nd

Equations:
P = $60,000 + 0.9S
equation into 1st:
S = $40,000 + 0.1P P = 105,495
CI share = .9P S = 50,550
NCI share = .1S CI share = 94,945
NCI share = 5,055
Conventional method is analogous to reciprocal cost allocation method.
06/09/2021 9-1
 Note on Results:
Results:
P = 105,495
S = 50,550
CI = 94,945
NCI = 5,055
• CI + NCI = $100,000, the total separate income
• Peterpan's Income from Sigma = 0.9S - 0.1P = $34,945
90% of Sigma's income – 10% mutual holding
• CI = Peterpan's separate income + Income from Sigma
$60,000 + $34,945 = $94,945 (as a check!)

06/09/2021 9-1
 Peterpan's Equity Method Entries

Cash 18,000  
Investment in Sigma   18,000
for dividends    
Investment in Sigma 37,945  
Income from Sigma   37,945
for income    
Income from Sigma 3,000  
Dividends   3,000
for Peterpan dividends paid to Sigma

06/09/2021 9-1
 Worksheet Entries - Conventional

Income from Sigma 34,945  

Dividends   18,000
Investment in Sigma   15,945
Noncontrolling interest share 5,055  
Dividends   2,000
Noncontrolling interest   3,055
Common stock 200,000  
Retained earnings 130,000  
Investment in Sigma   296,154
Noncontrolling interests   33,846
Investment in Sigma 70,000
Investment in Peterpan 70,000

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 Subsidiary Stock Mutually Held
Subsidiaries hold stock in each other
• Use conventional approach
• Treasury stock method is not appropriate
• It is not parent's stock
• Subsidiary stock is eliminated in consolidation

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 Subsidiary Mutual Holdings
Peterpan owns 80% of Sigma acquired at book value plus $25,000
goodwill.
Sigma owns 70% of Tango acquired at book value plus $10,000 goodwill.
Uno owns 10% of Sigma, cost method.
At the start of 2010:
• Investment in Sigma (by Peterpan, 80%), $340,000
• Investment in Tango (by Sigma, 70%), $133,000
• Investment in Sigma (by Tango, 10%), $40,000
• Noncontrolling interest, $102,000
For 2010:
  Peterpan Sigma Tango
Separate income 112,000 51,000 40,000
Dividends 50,000 30,000 20,000
06/09/2021 9-1
 Allocate income to CI and NCI
 Allocation Info. Peterpan Sigma Tango CI NCI Total
Separate income 112,000 51,000 40,000     203,000
Tango's allocation =>   .7U     .3U  
Sigma's allocation => .8S   .1S   .1S  
Peterpan allocation =>       1.0P    
Solving, substituting 2nd equation
Equations:
into 3rd (or 3rd into 2nd):
P = 112,000 + .8S U = 48,495
S = 51,000 + .7U S = 84,946
U = 40,000 + .1S P = 179,957
CI = 1P CI share = 179,957
NCI = .3U + .1S NCI share = 14,548 + 8,495 = 23,043
9-1 06/09/2021
 A Look at the Results
Results:
U = 48,495
S = 84,946
P = 179,957
CI share = 179,957
NCI share = 14,548 + 8,495 = 23,043
Consolidated income
• CI and NCI shares = 203,000, total separate income.
Intercompany income
• Peter's Income from Seth = .8S = 67,957
• Sigma's Income from Uno = .7U = 33,946
• Tango's Dividend income = 0.1(Sigma’s dividends) = 3,000
Individual reported income
• Peterpan's separate income + income from Sigma = 179,957
• Sigma's separate income + income from Tango = 84,946
06/09/2021 9-1
Terima Kasih Atas Perhatiannya

Eriana Kartadjumena, Ph.D, Ak, CSRS