Advanced Accounting: Consolidated Financial Statements Subsequent to Date of Acquisition summary

Computation of Consolidated Net Income (CNI)

Parent Approach
Parent Subsidiary
Net Income xx xx
Dividend Income (xx)
Amortization of Excess (xx)
Adjusted Net Income xx + xx = xx
NI Attrubuted to NCI x % of minority interest xx
CNI xx

Entity Approach

Parent Subsidiary
Net Income xx xx
Dividend Income (xx)
Amortization of Excess (xx)
CNI xx + xx = xx
NI Attrubuted to NCI x % of minority interest (xx)
NI Attrubuted to Parent xx

RE Parent Beg xx
NI Attributed to Parent xx
Dividends Declared of Parent (xx)
Consolidated RE End xx

Accounting for Investment in Subsidiary

Cost Method
Investment in Subsidiary = Acquisition Cost

Equity Method

Acquisition Cost xx
Share in Net Income xx
Share in Net Loss (xx)
Share in Dividend of Subsidiary (xx)
Amortization of Excess (xx)
Investment in Subsidiary End xx

NCI Beg xx
NCI - NI xx
NCI - Dividend (xx)
NCI - End xx