Consolidated PL

Question 1

Three Basic Principles

Answer 1

1. Adjust for intra-group items such as sales and dividends
2. From revenue to profit for the year include all of P’s income and expenses + S’s income and expenses + S’s other comprehensive income to all of S’s income to reflect control of S
3. After total comprehensive income - firstly show split of profit between amounts attributable to P’s and NCI and then show split of total comprehensive income between

Question 2

Working

Answer 2

W1 - Group Structure

W2 - NCI

    Subs profit for the year
       Less: FV Depreciation
                 PUP (Sub seller)
                 Impairment (FV method)

Question 3

Intra-group items

Answer 3

Sales/Purchases = Remove both revenue and cos

Interest - Remove paid and received

Dividends Remove received by P from S (Investment Income)

PUP - Calculated, add to COS - Sub=seller update w2

Question 4

IAS 1 - PL Pro-forma

Answer 4

Revenue (P+S -Intra group sales)
Less: COS (P+S-intra group purch+PUP+FV Depr.)
=Gross Profit

Less: Operating Costs (P+S+Goodwill Impairment)
=Profit from Operations

LESS: Finance Cost (P+S+Unwinding -Intra-group interest charge)

+ Investment income (P+S-Intra-group interest income - dividend from S)

+Profit from A (W3)

=PBT

LESS:
Tax (p+s)

=Profit for the year

OCI
Revaluations gain (p+s)
=Total Comprehensive Income

Profit attributable to

P’s shareholder (balancing figure)
NCI w2