W5

Q1

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What does FASB define as a "noncontrolling interest" in a consolidated entity? Where do you think the noncontrolling interest claims should be reported in a set of consolidated financial statements? Use an actual corporation's financial statements where noncontrolling interest is reported. Be certain to look both at the financial statements and the Notes to the financial statements. Support your position with authoritative reference sources.

C1

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The FASB defines noncontrolling interest as “The ownership interests in subsidiaries held by parties other than the parent be clearly identified, labeled, and presented in the consolidated statement of financial position within equity, but separate from the parent’s equity. The amount of consolidated net income attributable to the parent and to the noncontrolling interest be clearly identified and presented on the face of the consolidated statement of income. The noncontrolling interest should be located at the equity side of the balance sheet.

 

The way I see noncontrolling interest is that it is related to the owners which ownership of the subsidiary is less than 20%. The book approaches to this subject as “the amount of intra-entity profit or loss to be eliminated in accordance with paragraph 810-10-45-1 is not affected by the existence of a noncontrolling interest. The complete elimination of the intra-entity income or loss is consistent with the underlying assumption that consolidated financial statements represent the financial position and operating results of a single economic entity. The elimination of the intra-entity income or loss may be allocated between the parent and noncontrolling interests” (Hoyle, J., Schaefer, T., & Doupnik, T. 2016)

 

Q3

Video

COLLAPSE

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Go to the European Financial Reporting Advisory Group (EFRAG)

YouTube website:  https://www.youtube.com/channel/UCxcljiiUM2JD02SMuFUTUwA 

Select any EFRAG recording and post a substantive discussion describing the contents of the video and what you learned from the information on the advisory group.  Please include the URL to the video in your discussion post for a total of two (2) posts.

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Q4

Please click on the link above to view the grading rubric and to submit your case.

Costco Wholesale Corporation owns and operates membership warehouses in the United States, Canada, United Kingdom, Mexico, Japan, Australia, and Spain. Costco also engages in retail operations through majority owned subsidiaries in Korea and Taiwan. The outside equity interests (not owned by Costco) in the Korean and Taiwanese subsidiaries are presented collectively as noncontrolling interests in Costco’s consolidated financial statements.

Access Costco’s most recent 10-K annual report and answer the following:

1.  How does Costco present the noncontrolling interest in the following financial statements?

· Consolidated Balance Sheet

· Consolidated Income Statement

· Consolidated Statement of Other Comprehensive Income

· Consolidated Statement of Cash Flows

2.  Explain how Costco’s presentations of the noncontrolling interest reflect the acquisition method for consolidated financial reporting as a single economic entity.

You can access Costco’s 10-K annual reports in the SEC’s Company Search page and on Costco's website.

https://www.sec.gov/edgar/searchedgar/companysearch.html

Include complete reference list information and the URL link in your List of References. Cite the exact page number used in your in-text cite.

Paper Format:

·  Minimum 3 pages total (not including title page, abstract or reference page)

·  Proper APA format

·  Minimum of 4 scholarly sources including a limited use of your textbook.