Question & Answer: answer both questions with paragraph or 4 setences and recieve thumbs up ^^…..

Under the economic unit concept, where is the noncontrolling interest most likely to be shown?

FAS 160 requires noncontrolling interest be reported in equity and establishes a new framework for recognizing net income or loss and comprehensive income by the controlling interest. FAS 160 requires specific disclosures regarding changes in equity interest of both the controlling and noncontrolling parties and presentation of the noncontrolling equity balance and income or loss for all periods presented.

Under the economic unit concept, where is the accounting emphasis placed?

A few respondents to the noncontrolling interest Exposure Draft suggested that the Board require that the noncontrolling interest be presented as a liability in the consolidated statement of financial position. The Board also rejected that alternative. The Board concluded that a noncontrolling interest in a subsidiary does not meet the definition of a liability in the Board’s conceptual framework. Paragraph 35 of Concepts Statement 6 defines liabilities as “probable future sacrifices of economic benefits arising from present obligations of a particular entity to transfer assets or provide services to other entities in the future as a result of past transactions or events” (footnote references omitted). Concepts Statement 6 goes on to explain that a liability embodies a present duty or responsibility to one or more other entities that entails settlement by probable future transfer or use of assets at a specified or determinable date, on occurrence of a specified event, or on demand. The Board noted that the existence of a noncontrolling interest in a subsidiary does not give rise to a present obligation of the consolidated group. Not one of the entities involved—the parent, the subsidiary, or the consolidated entity—is obligated to transfer assets or provide services to the owners of interests in the subsidiary. That conclusion is consistent with paragraph 254 of Concepts Statement 6, which states:

Minority [noncontrolling] interests in net assets of consolidated subsidiaries do not represent present obligations of the enterprise to pay cash or distribute other assets to minority stockholders. Rather, those stockholders have ownership or residual interests in components of a consolidated enterprise. The definitions in this Statement do not, of course, preclude showing minority interests separately from majority interests or preclude emphasizing the interests of majority stockholders for whom consolidated statements are primarily provided