Group CR Flashcards
Intra group trading in individual FS
As both companies are seperate legal entities there is no adjusyment made to individual FS
There will just be an IAS24 disclosure as they are related parties.
Intra group trading in group accounts
Sale non left in inventory
Group FS are prepared using single entity concept
Therefore any amount arising from trade between P and S needs eliminating (can not trade with yourself)
DR Revenue adj column
CR COS adj column
Intra group trading in group accounts
Stock left in inventory
If the seller makes a profit from intragroup trading then inventories of the purcharser will me higher than the orginal costs
Need to reduce inventory so reflects the actualy cost to the group
DR inventory buyer
CR COS PURP seller
Loan between P and S (FX)
Under IAS 21 any monetary items denominated in a foregin currency should be translated at the CR with any FX gain or loss recorded in Pnl
Interest on loan between P and S
Interest should be accrued in the individual FS
Any interest between P and S should be elimanated when consolidating the FS
Calculating good will for foreign sub
- calculate good will on FX
- Translate goodwill into £ at the HR
- Translate goodwill into £ using CR
Diffence is FX gain or loss this is charged to OCI
Rember if using FV method a prorotion of the FX will belong to NCI
Proportionate method all P
How to calculate the FX difference on NA on
Compare NA at aquisiton using CR and HR
Compare CY RE using CR and AR
add both differnces to together. Goes to revaluation reserves amd OCI