| Abstract: | In this case students explore the financial statements of Alcoa as an example of a consolidated company with minority interest in order to understand minority interest and the differences among the concepts of accounting for consolidated enterprises: economic-unit, parent-company, and proportionate concepts. Unlike other Fortune 500 companies, Alcoa presents sufficient footnote disclosures to approximate financial statements based on each theoretical concept. Although Alcoa, and most public companies, primarily follow a mix of parent-company-concept and economic-unit-concept, students need to understand all three concepts discussed in FASB Discussion Memorandum Consolidation Policy and Procedures (FASB, 1995) because accounting for consolidated enterprises is changing in the 1990s and will surely continue to evolve during their professional careers. By transforming Alcoa's financial statements to be consistent with each accounting concept and evaluating the usefulness of these statements, students expand their understanding of minority interest and consolidated financial statements from a user's perspective and gain insight into accounting theory. |
