Consolidated P&L with subsidary

| QUOTE REPLYApril 20, 2015 at 11:18 am
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alice10
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Hi

I’m trying to complete a consolidated P&L question with a subsidary and a foreign subsidary but I don’t know how to approach the consolidation with both?

The question is Parsley,Sage,Saffron:
1. Parsley acquired 70% of Sage’s one million $1 ordinary shares for $6m many years ago. At the acquisition date, the carrying value of Sage’s net assets was $5m, and this was deemed to be the same as their fair value. The non-controlling interest was measured using the proportion of net assets method. Goodwill arising on the acquisition of Sage has never been impaired. On 31 October 20X3, Parsley sold 300,000 of its shares in Sage for $6.5m. The fair value of the interest retained was $9.5m. The retained earnings of Sage were $9m as at 30 April 20X3. The only entry posted in Parsley’s individual financial statements is to record the cash received and to credit these proceeds to a suspense account.

2. On 1 May 20X3, Parsley purchased 60% of Saffron’s one million FR1 ordinary shares for FR71m. The non-controlling interest at acquisition was valued at FR29m using the fair value method. At 1 May 20X3, the carrying value of Saffron’s net assets was FR60m but the fair value was FR70m. The excess in fair value was due to an unrecognised brand with a remaining useful economic life of five years at the acquisition date

Would appreciate some guidance

Many thanks