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Actual journal entries?

Thanks umarhussainia for the detailed explanation.

Please also provide the actual journal entries i.e. which account is debited and which account is credited for CTA & NCI.

Also, please advise whether the elimination (intercompany for consolidation) entries are also posted in gl? If yes, what are the entries for the same as well?

asked Mar 2 in General IFRS Discussion by Pratik

1 Answer

0 votes
journal entries for NCI
suppose one of your subsidiary earns 100$ profit during the year, then the share of parent company,say 80%, of profit would be credited to parent reserves and remaining share of profit would be credited to NCI,All these adjustments would be done in Consolidated statement of equity.
Journal entries for CTA
Assume you invested an amount of US$100 million in the foreign operation. Further assume that your US$ investment has appreciated to US$120 million, only due to the change in the foreign exchange rate. So how do you record the US$20M unrealized gain in your books.
DEBIT: Increase in foreign assets (investment) US$20M
CREDIT: Cumulative Translation Adjustment account (CTA) US$20M

You will record the following journal entry when you liquidate your foreign subsidiary
DEBIT: Cumulative Translation Adjustment account (CTA) US$20M
CREDIT: Income Statement US$20M

as far as inter company balance concerns, these adjustments are only for consolidation process
answered Mar 3 by umarhussainia Level 5 Member (10,570 points)