Accounting Thoery Research

In negotiations prior to the issuance of SFAS clx, Noncontrolling Interests in Consolidated pecuniary teachings, the FASB considered three alternatives for displaying the noncontrolling engagement in the consolidate balance planing machine of paper were: 1. As a liability 2. As comeliness 3. In the area amid liabilities and owners equity The FASB evaluated whether the classifications conformed to current comments of monetary record elements (assets, liabilities, or equity) as show in FASB Concept Statement No. 6. According to SFAS 160 paragraphs 32-34, if it required that the noncontrolling divert be reported in the mezzanine, the senesce would have had to develop a new-fangled element noncontrolling involvement in subsidiaries specifically for consolidated financial statements. The dialog box decided that no compelling reason exists to create a new element specifically for consolidated financial statements to report the interests in a subsidia ry held by owners former(a)wise than the parent. The board believes that exploitation the existing elements of financial statements along with set aside labeling and disclosure provides financial information in the consolidated financial statements that is re exemplifyationally faithful, understandable, and relevant to the entitys owners, creditors, and other resource providers.

The board open up that a noncontrolling interest in a subsidiary does non meet the definition of a liability in the boards conceptual framework. Paragraph 35 of Concepts Statement 6 defines liabilities as likely future tense sacrific es of economic benefits arising from present! obligations of a particular entity to hit assets or provide service to other entities in the future as a give of past transactions or events The board established that a noncontrolling interest represents the residual interest in the net assets of a subsidiary within the consolidated group held by owners other than the parent. The noncontrolling interest, therefore, meets the...If you want to get a full essay, order it on our website: BestEssayCheap.com

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