Topic 2- Consolidated Statement of Profit and loss Flashcards
If a parent and sub’s have different year ends, within how many months should each other’s YE date be in order for the accounts to be considation
within 3 months of each other
What is the key thing that is changed for CSPL ?
To eliminate intra- group transactions
On the Consolidated statement of profit and loss and other comprehensive section, what is the main thing that is different from a single entity’s statement?
The profit for the year and total comprehensive income are broken down/Split to show:
the income/profit attributable to Group and Non controlling interest
If a subsidiary was acquired part way through the year, how is it considered when you are creating CSPL
100% Parent + (100%Subsidiary x Months)
On the Consolidated statement of profit and loss and other comprehensive section,
how are is revenue shown?
100% of P + S
-/Minus
Inter company sales
On the Consolidated statement of profit and loss and other comprehensive section,
how are is Cost of sales shown and what is very important to remember
100% of P + S
-/Minus
Inter company purchases
+ PURP (w5)
You MUST REMOVE THE TOTAL INTERCOMPANY SALES IRRESPECTIVE OF WHETHER IN INVENTORY AT THE END OF THE YEAR
On the Consolidated statement of profit and loss and other comprehensive section,
where does impairment of good will in the subsidiary go?
on the operating expense as a + increasing the cost
On the Consolidated statement of profit and loss and other comprehensive section,
how are investment income shown?
100% of P + S
-/Minus
Inter company interest i.e. Dividends from Subsidiary
On the Consolidated statement of profit and loss and other comprehensive section,
how are Finance cost shown?
100% of P + S
-/Minus
Inter company interest e.g. . interest from loan between S+P
On the Consolidated statement of profit and loss and other comprehensive section,
WHEN/HOW is revaluation gain shown of the subsidiary ?
Gain would happen in a point in time therefore it must be realised in the period it happened and therefore
DO NOT PRORATE
On the Consolidated statement of profit and loss and other comprehensive section, how are the associates shown?
A a separate line
'’Share of profit/loss of an associated company’’
A Parent’s % ownership of the associates profit after tax since acquisition
- Minus
PURP if A sells to P
If an associate sells to the parent, what is the adjustment?
I.e. associate has the profit on inventory that are still in the group, within the inventory of the parent
Dr Share of profit of associate (Reduces the profit on goods that are still in the group)
Cr Group inventory (Reduce goods to cost to the group)
If an parent sells to the associate, what is the adjustment?
I.e. parent has recognised the profit on inventory that will be brought back into the group within the share of net assets of the associate
Dr Cost of sales (cancel profit still in the group)
Cr Investment in associate (Reduces goods to cost to the group)
when a subsidiary has been disposed, which accounts on the Consolidated Statement of Financial Position will need to be adjusted?
1) Net Assets (All A+L we added relating to subsidiary)
2) Good will
3) Non Controlling interest
when a subsidiary has been disposed, accounts on the Consolidated Statement of Financial Position will need to be adjusted
table method
OR A TABLE METHOD
Proceeds Less: Net assets at date of disposal Less: Net Good Will at date of disposal Add: NCI at date of disposal = Gain/Loss on disposal
