- This topic has 1 reply, 2 voices, and was last updated 1 year ago by
.
- Posts
Hi. I have spent about 30 minutes in trying to understand this question from the bpp revision kit of financial reporting.
Brigham Co has owned 70% of Dorset for many years. It also holds a $5MILLION 8% loan note from dorset co. The financial statements of dorset co show a profit for the year of 1.3million for the year ended 31 december 20×6.
It also acquired 80% of the equity shares of york co on 1 july 20×6. The financial statements of york show a profit of $2.4million.
Profits accrue evenly throughout.
What is the amount attributable to NCI in the consolidated SOPL?
The suggested answer says:
DORSET PROFIT OF THE YEAR 1300
INTRAGROUP INTEREST (400)
NCI IN DORSET CO 270YORK CO PROFIT 1200
NCI IN YORK CO 240TOTAL NCI 510
My question is do i have to assume the interest was not deducted in arriving at the profit of dorset co? I fully understand the York co part.Hi,
I think the answer is incorrect as the interest will already have been accounted for through profit or loss, so there is no reason as to why the answer has deducted the interest from the intra-group loan. the answer should just be the 30% of the profit for the year of 1300.
Thanks
- You must be logged in to reply to this topic.