Group Statements of Comprehensive Income (GSCI) Flashcards
How are intra-group sales treated in GSCI?
Intra-group sales are eliminated from both group revenues and COGS in the consolidated financial statements.
What happens to unrealised profits on intra-group inventories in GSCI?
Unrealised profits are deducted from group inventories, increasing the group’s COGS by the same amount.
How are intra-group interest and trade payables handled in GSCI?
Intra-group interest and trade payables are cancelled out to avoid double-counting within the group.
What happens to dividends paid from a subsidiary to the parent in GSCI?
Dividends paid from a subsidiary to the parent are eliminated in the consolidated statement of comprehensive income.
How is goodwill impairment accounted for in GSCI?
Goodwill impairment is expensed in the GSCI if it occurs during the period.
How are non-controlling interests (NCI) treated in GSCI?
The portion of profits attributable to NCI is deducted from the group’s profits in the GSCI.
How should intra-group inventory sales be treated in consolidated statements?
Profits from intra-group inventory sales are eliminated, as profits are only recognized when sold to external parties.
How are intra-group transactions that include inventory adjustments recorded?
The selling company records a profit, while the purchasing company records the inventory at purchase cost. Adjustments ensure only external profits are shown.
What adjustments are made for unrealised profits from parent-to-subsidiary sales?
Debit retained earnings and credit inventory by the amount of the unrealised profit to remove it from group earnings.
What adjustments are made for unrealised profits from subsidiary-to-parent sales?
Debit retained earnings and NCI (based on ownership percentage), and credit inventory by the amount of unrealised profit.
How are intra-group dividends recognized in the consolidated financial position?
Dividends are cancelled on consolidation between parent and subsidiary. Dividends to NCI are separately calculated.
How are retained earnings handled after acquisition in GSCI?
Post-acquisition changes in the subsidiary’s retained earnings are attributed to the parent company over the ownership period.
