The accounting standards for consolidated financial statements have been updated recently. The change involves the measurement of goodwill and noncontrolling interest. Under the new accounting standards, goodwill consists of not only the parent company’s portion but also the noncontrolling interest’s share. The noncontrolling interest comprises both the subsidiary’s identifiable net assets and goodwill. In addition, it further changes the treatment of noncontrolling interest from liability to equity. The change indeed has far-reaching consequences on financial statements. This paper formulates an equation to measure goodwill and noncontrolling interest. It also provides some examples for illustrative purposes. The purpose of this paper is to update the financial reporting to the current standards.
New accounting standards under FASB #141R and 160.
New accounting standards in measuring goodwill and noncontrolling interest in financial reporting.
The knowledge is useful for accountants and financial analysts.
Improve the quality of financial statements.
Investors will be better informed.
This new accounting standard was not explored before.
Yang, J.G.S. and Aquilino, F.J. (2017), "Measuring goodwill and noncontrolling interest under the new consolidation accounting standards", Journal of Financial Reporting and Accounting, Vol. 15 No. 2, pp. 198-207. https://doi.org/10.1108/JFRA-05-2015-0055
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