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Hi tutor,
In p/l we only consolidate subsidiaries right?
So we we got an assosiate we only time apportion all figures in p/l to consolidate only when it was a subsidiary…
However in sfp… we dont time apportinate figure ??
I am confused plz correcty my misunderstanding
Thank u v much
Hi,
We only ever consolidate subsidiaries, any associates are equity accounted for.
Figures are pro-rated in the SPL as the statement shows the revenue and costs over a period of 12 months and we only need to consolidate the results from when we gained control, hence pro-rating the figures.
The figures in the SFP are not pro-rated as this statement shows the assets and liabilities we control at the reporting date, hence it does not matter when we gained control as at the year end we have control of all the assets and liabilities of the subsidiary, regards of how long we’ve controlled them for.
Thanks
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