Consolidated P/L With Associates Flashcards
Line items in a consolidated P/L with associates
Revenue
Cost of Sales
Gross Profit
Distribution Costs
Administrative Expenses
Profit from Operations*
Share of income of associates*
Finance Cost
Profit before tax
Income tax expense
Profit for the period
Attributable to:
Owners of parent group (bal fig)
Non controlling interest
How is revenue calculated in consol p/l
Parent company + sub company * time apportioned
Less Intra company trading at full cost
Cost of sales working
Parent company share X
Sub company share * Ta X
Intra group purchases (X)
Unrealised profit on sale of plant X
Depreciation adjustment on sale of plant (TA) X
PUP Inventory X. = profit * (items in inv/total cost + profit)
Goodwill line items
Consideration Transferred:
Shares (total no.of shares * parent % = var * shareswap * current price)
Deferred Consideration (var*future price/discount rate 1.05)
NCI at fair value (total no. Of shares * NCI% * valuation price, could be in notes)
Less fair value of net assets required
Equity shares (total no.of shares)
Pre acquisition reserves (retained earnings + (T.A before acquisition * subs profit for period)
Fair value adjustment (increase in FV of assets - contingent liabilities)
Goodwill = consideration transferred - less fair value of net assets required
Calculate deferred consideration for statements and where would it go in the statements
Deferred consideration:
-in goodwill (total no of shares * Parent %= var * future price/discount rate) = D.C
In statement
D.C * cost of capital * T.A
It would go in finance cost
Working for calculating profit attributable to NCI
Subsidiary profit for the year * T.A. X
Less depreciation on fair value adjustment (X)
Less PUP on sales MADE BY SUBSIDIARY (X)
Less goodwill impairment in year (full goodwill) (X)
Adjusted subsidiary profit for the year
* NCI % == “X”
Working for calculating value of investment associate
Cost of investment ( no. Of shares in associate * share price). X
Share of profits (share in associate * associate profit for the period * TA for associate). X
Less unrealised profit (PUP inv + sale of plant profit). (X)
Less dividend from associate (total associate shares * dividend price). (X)
Share of income of associate (line item) working and where does the line item come in the statement
Share of profits (share in associate * associate profit for period * TA0
Less impairment (X)
Less unrealised profit (X). (Profit*(items in inv/total cost)) * share in associate
If there is goodwill in admin expense is it + or -
it will be + because the expense if being added to the line item
Where is intra group trading eliminated and from who will it be eliminated
Eliminated in revenue line item
Eliminated in full but only for associaate
