Consolidated Statement Of Profit Or Loss

Question 1

What needs to be eliminated?
How do we initially measure?
How do we measure NCI?
How many months do we need to be within to consolidate with different year ends?
What must the parent and sub have in uniform?

Answer 1

Intragroup transactions
100%xSub NA x n/12
NCI % x PAT(or total comprehensive income)
3 months
Accounting policies

Question 2

How do we consolidate revenue?

Answer 2

100% P
100% sub x n/12
- intercompany sales

Question 3

How do we calculate mid year acquisitions?

Answer 3

100% P
100% sub x n/12
- Intercompany sales

Question 4

How do we work out consolidating cost of sales?

Answer 4

100% P
100% sub x n/12
- Intercompany sales
+ PURP

Question 5

How do we work out goodwill?

Answer 5

100% P op exp
100% S op exp x n/12
FV adj (costs/uel)

Question 6

How do we work out dividends paid by the sub? What needs to be eliminated?

Answer 6

100% P investment income
100% subs investment income x n/12
- intragroup (P% x div paid by sub)

Dividends paid by parent to sub need to be eliminated

Question 7

How do we work out profit attributable to non controlling interest and group?

Answer 7

Profit attributable to
NCI - PAT x n/12 x NCI%
Group - Balancing amount

Question 8

What adjustments do we make to the NCI?(3)
Why additional depreciation?
When PURP?
When goodwill?
How do we work out NCI?

Answer 8

Additional Depreciation
PURP
Goodwill

Because affects sub so affects NCI
When sub sells to parent
When measured at FV

100% sub
-PURP
SUBS PAT
x NCI%

Question 9

Associates
What are they not?
How do we work out the investment in associate?
Where is this shown?
What do we do if the como underperforms?
How do we account for Intercompany sales?
When do we remove dividend paid?
What’s the initial double entry for PURP if A-P? P-A?

Answer 9

Consolidated
P% x(PAT-PURP) - impairment x n12
Operating profit
Impair
Remove PURP if A sells to P
When A pays to P
Dr Share of Profit in Associate
Cr Group Investment

Dr Group CoS
Cr Inv in Associate