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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Consolidation (statement of financial position) loan notes
we have 8% loan notes of subsidiary say 500
it includes parents 60% investment (in loan notes).
we eliminate the 60% investment of parent.
do we have to make the adjustment for interest on 8% loan notes?
if yes what adjustments we have to make?
Hi,
Yes we eliminate the intra-group balances on the SFP and the intra-group interest in the SPL. We would remove the finance cost and the investment income to do so.
Thanks
Hi
what does it really mean to “invest in someones loan stock” ? does it like split the liability of the loan taker by the percentage that we invested in it & why would anyone do that?
thanks
Hi,
The issue will sell the loan stock (DR Bank CR Loan Stock)
The investor/purchaser/provider of finance will buy or invest in the loan stock (DR Investment CR Bank).
Thanks.