19. Consolidated statement of profit or loss

Question 1

How do we calculate the NCI for the consolidated P+L?

Answer 1

Subsidiary's profit after tax
Less:
Fair value depreciation
PUP (Where subsidiary is seller)
Impairment (If using FV)

NCI (Multiply by By %)

Question 2

What is consolidated sales revenue?

Answer 2

Consolidated sales revenue = P’s revenue + S’s revenue – intra-group
sales.

Question 3

What is the Consolidated cost of sales

Answer 3

Consolidated cost of sales (COS) = P’s COS + S’s COS – intra-group
sales.

Question 4

What do we do with interest on loans between the parent and subsidiary?

Answer 4

Eliminate

Question 5

What do we do with dividends paid by S to P?

Answer 5

Eliminate from investment income

Question 6

How do we adjust for intra group sales when P sells to S?

Answer 6

Eliminate sale in

• Revenue (Subtract)
• Cost of sales (Add)

Eliminate unrealised profit in

-Cost of sales (Subtract)

Question 7

How do we adjust for intra group sales when S sells to P?

Answer 7

Eliminate sale in

• Revenue (Subtract)
• Cost of sales (Add)

Eliminate unrealised profit in

• Cost of sales subtract
• NCI profit

Question 8

How do we adjust for sale of NCA between the entities?

Answer 8

• Any profit or loss from transfer is removed from the sellers profit
• The depreciation charge for buyer must be adjusted so its based on the cost of asset for the group

Question 9

How do we adjust for impairment of goodwill?

Answer 9

• Usually deduct from operating expenses

- Also deduct NCI share from profit