When preparing a group statement of comprehensive income, the correct treatment of dividends paid by a subsidiary company to its non-controlling shareholders is to:

When the Net income received from Subsidiary: (e.g.100000 assuming20% non-controlling interest)

 

Net Income-Sub(other Income a/c)              100000

                  Investment in Sub(equity)                              80000

                  Non-controlling Int(equity)                              20000

 

when divident paid by subsidiary:  (e.g.  20000 assuming20% non-controlling interest)

 

Investment in Sub(equity)        16000

Non-controlling Int(equity)      4000

                          Div-Sub(Other income a/c)          20000

 

since adjustment in equity will be net effect of income (Net income-Div) of subsidiary so Option B is correct.

 

 

d. Add them to the profit attributable to the non-controlling interest

income tax sale tax withholding tax lavy duty tax on import and export excise taxation are the comprehensive income resources

When preparing group statement of comprehensive income only those dividends paid to the owners of the consolidated entity can be included in the consolidated retained earnings statement.Because the owners of the parent company are considered to be the owners of the consolidated entity, only dividends paid by the parent company to its shareholders are treated as a deduction in the consolidated retained earnings statement; dividends of the subsidiary are not included.