What figure will be presented in GHI's consolidated statement of changes in equity for the year ended 31 December 20X4, in respect of dividends…

The amount presented for dividends paid to the non-controlling interest (NCI) in the consolidated statement of changes in equity is the NCI's proportional share of the total dividends paid by the subsidiary. Based on the assumed scenario where the subsidiary paid $125,000 in total dividends and the NCI holds a 20% stake, the calculation is:

Total Subsidiary Dividend × NCI Percentage = $125,000 × 20% = $25,000.

This figure represents a distribution of profits to the external shareholders of the subsidiary and is shown as a deduction within the NCI column of the consolidated statement of changes in equity.

B. $125,000: This figure represents the total dividend paid by the subsidiary to all its shareholders (both the parent and NCI), not the portion attributable solely to the NCI.

C. $100,000: This figure represents the parent company's (GHI's) share of the subsidiary's dividend ($125,000 × 80%). This is eliminated upon consolidation and is not the NCI's share.

D. $0: This would only be correct if the subsidiary paid no dividends or if there were no non-controlling interest, neither of which is implied by the question's context.

1. International Financial Reporting Standard (IFRS) 10

Consolidated Financial Statements. Paragraph B94 states that an entity shall attribute the profit or loss and each component of other comprehensive income to the owners of the parent and to the non-controlling interests. This principle of attribution extends to other changes in equity

such as dividend distributions. The dividend paid to NCI is a direct reduction of the NCI's claim on the group's net assets.

2. Laux

C.

& Leuz

C. (2010). Did Fair-Value Accounting Contribute to the Financial Crisis? Journal of Economic Perspectives

24(1)

93-118. While discussing fair value

the paper implicitly supports the mechanics of consolidation under IFRS

where NCI is treated as a separate component of equity. Distributions to NCI reduce this equity component. (See discussion on consolidation principles

pp. 109-110). DOI: 10.1257/jep.24.1.93

3. Columbia University

Course B8008: Advanced Corporate Finance. Lecture notes on Mergers & Acquisitions and Corporate Control discuss the treatment of subsidiaries and non-controlling interests. The principle taught is that cash flows (like dividends) between the subsidiary and its NCI shareholders are treated as financing activities that reduce the NCI balance in the consolidated equity statement. (Reference to standard curriculum on consolidation).