Final answer:
A 20% noncontrolling interest in a subsidiary is reported on the consolidated balance sheet at its proportional share of the subsidiary's fair value of net assets at acquisition, mirroring an arms-length transaction.
Step-by-step explanation:
Following U.S. GAAP, a 20% noncontrolling interest in a subsidiary is reported on the consolidated balance sheet at the date of acquisition at the proportional share of the subsidiary's fair value of net assets at the acquisition date. This amount typically reflects the noncontrolling interest's share of the book value of the subsidiary's assets and liabilities adjusted to fair value.
The amount reported represents the price that would be paid for this portion of the company in an arms-length transaction. Therefore, if the total fair value of the net assets of the subsidiary acquired is $100,000, the 20% noncontrolling interest would appear as $20,000 on the consolidated balance sheet.
Following U.S. GAAP, a 20% noncontrolling interest in a subsidiary is reported on the consolidated balance sheet at the date of acquisition at its fair value. Noncontrolling interest refers to the ownership interest in a subsidiary that is held by parties other than the parent company. Under U.S. GAAP, noncontrolling interest is reported as a separate line item on the consolidated balance sheet.
For example, if a parent company acquires 80% of a subsidiary's shares, the remaining 20% represents the noncontrolling interest. The fair value of that 20% noncontrolling interest would be determined at the date of acquisition and reported on the consolidated balance sheet accordingly.
It is important to note that the fair value of noncontrolling interest may change over time and would be adjusted accordingly in subsequent financial statements if there are any changes in ownership percentage or valuation.