If you own 80% of a company, and that company has net income of 100, do you receive all $100 of the net income as a parent company, or do you only receive $80?
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all in cash but net income would drop (non tax deductible) do to the NCI. you create a non controlling interest line under share holders equity.
so net income is down $20 which flows to the top of the CFS. add back $20 because you're not actually losing cash. On the balance sheet, under shareholder's equity, retained earnings is down $20 and non controlling interest is up $20 balancing out.
Can you explain why the company receives $100 in cash, but for their net income, it only reflects $80. Why is it like this?
I would've done it as: I/S: Net Income from Subsidiary +100, Net Income Attributable to NCI +20 --> Net Income +80 CFS: Net Income +80, Net Income Attributable to NCI +20 (the reason for this is because your statements are consolidated), Change in Cash = +100 B/S: Cash +100, RE +80, NCI +20 --> balanced
I would agree with this OP. Here's a https://www.bamsec.com/filing/7747617000033?cik=77476</a">good example from Pepsi's latest 10-Q
Can you explain why you subtract 20 from the net income? What's the point of doing that if you are actually receiving 100 in cash?
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