24. Group Accounts: The Consolidated Income Statement

Question 1

What is the aim of the Consolidated Statement of Profit or Loss?

Answer 1

To show the profit or loss of the group as if it were a single entity.

Question 2

How is inter entity trading dealt with on the consolidated statement of profit or loss?

Answer 2

Sales revenue and cost of sales is reduced by the value of inter entity sales during the year.

Question 3

How are sales at a profit within the group dealt with when some of the goods are still in inventory by the end of the year on the Consolidated SoPL?

Answer 3

Increase the cost of sales for the group by the amount of unrealised profit in inventory.