[drishti1234]

Thankyou sir.

[drishti1234]

Thankyou sir!

[drishti1234]

And why do we subtract the interest from finance cost of subsidiary?

[drishti1234]

Thankyou sir, I understood!

[drishti1234]

Ok sir I understand this concept. But how will we treat this example :
Suppose on 31 march 2010, A has current ac with B as 3.4m(dr). Which did not agree with equivalent bal with B due to CIT of 1.8m which was sent by A on 28th march 2010?

[drishti1234]

Sorry sir, but I still didn’t understand what we actually have to do.

[drishti1234]

Thankyou sir, now all my doubts are cleared!

[drishti1234]

Sir am I correct if I say that, as it is intra co. Investment, the group receives the investment income and also have to pay off interest on it, this is the reason why we are adding interest on investment in subsidiary’s post acquisition profit and also deducting it from finance cost.

Thankyou.

[drishti1234]

Sir,
Question name is Pandar, Kaplan exam kit.
The question asked us to prepare SPL, we are given that Parent invested 5000 8% loan notes from Subsidiary.
while calculating NCI for attribution, the 8% interest on loan notes is added to subsidiary’s post acquisition profit, and also this interest is reduced from finance cost.
Why are we doing this?

[Author]

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