Financial Accounting and Reporting

Running head: FINANCIAL ACCOUNTING AND REPORTING 2
Financial Accounting and Reporting 2
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1FINANCIAL ACCOUNTING AND REPORTING 2
Table of Contents
Memorandum...................................................................................................................................2
Part 3: Non-controlling interest...................................................................................................2
Part 4: Goodwill...........................................................................................................................3
Part 5: Intra-group transactions and balances..............................................................................5
Part 6: Accounting for foreign subsidiary companies.................................................................6
References:......................................................................................................................................8

2FINANCIAL ACCOUNTING AND REPORTING 2
Memorandum
Date: 08/09/2018
To: The Board of Directors, Telstra Corporation
From:
Subject: Technical aspects of consolidation
Part 3: Non-controlling interest
Non-controlling interest is termed as minority interest and it is a position of ownership, in
which a shareholder owns below 50% of the outstanding shares having no control over decisions
(Barth 2015). Thus, non-controlling interests are gauged at net asset values of the organisations
and they do not account for potential voting obligations. The non-controlling interests of an
organisation are represented in the income statement and other comprehensive income statement
as well as in the balance sheet statement. From the annual report of Telstra Corporation, it could
be stated that the organisation has disclosed its non-controlling interests in the above-mentioned
statements as well. In the income statement and other comprehensive income statement, the non-
controlling interests of the organisation amounted to ($17 million) in 2017 compared to $69
million in 2016. On the other hand, in the balance sheet statement, the non-controlling interests
of Telstra Corporation amounted to $19 million in 2017 compared to $36 million in 2016.
Generally, there are two types of non-controlling interests, which include direct non-
controlling interests and indirect non-controlling interests. In the words of Francis et al. (2015),
direct non-controlling interests obtain a proportionate apportionment of all the recorded
subsidiary equity that includes pre-acquisition as well as post-acquisition amounts. On the other