SoftBank to Shift Arm’s Stake in Troubled China Unit Before IPO

Arm Ltd. is shifting a chunk of its stake in Arm China to parent SoftBank Group Corp. and revising how it accounts for the troubled Chinese affiliate, a bookkeeping change that may ease the British chip designer’s path to an initial public offering, according to people familiar with the matter.

Arm Ltd. will end up holding less than 20% of Arm China and will treat it as an uncontrolled affiliate for accounting purposes, the people said, asking not to be identified because the details are private. Arm China will be treated like any other license-paying customer rather than a fully controlled subsidiary, the people said.