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Hi,
Hoping you could help with a question from a study book;
Savoy owns 80% of Spring, 30% of White.
Profit for year end (£000);
Savoy 700
Spring 550
White 500What is the group Profit?
According to answer, it’s £1,400.
Savoy = 700
Spring = 550
White (30% x 500) = 150I don’t understand why it’s not calculating 80% of Spring? (and it’s calculating full 100%). Question or answer doesn’t mention any other info.
Hi,
Spring is a subsidiary and so it will be consolidated 100% on a line-by-line basis. The full 550 profit will therefore be included within the group profit figure.
The only adjustment made is for the NCI share given when the profits are then split attributable to each of the sets of owners (parent and NCI)
Thanks
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