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Good Day Sir,
I would just like to ask, how do we treat Intra-Group Loans in the Financial Statements?
Do we deduct them (like PURPS) or do we simply add them to consolidation?
I saw in some examples that the interest element of the loan is deducted from Group RE, Finance Cost and Investment Income. But in some other examples they are simply added.
I am really confused.
Thank you in advance sir.I do not attend any tuition providers, I study through your videos and other resources entirely and using this method, I passed F1-F6 so thank you very much to you and your team!!
“But in some other examples they are simply added.
I am really confused.”Yes, me too!
I cannot believe that the investment income and the finance cost of loan interest have not been cancelled
Make sure that the loan is an intra-group loan and that interest is being paid outside the group
“I do not attend any tuition providers, I study through your videos and other resources entirely and using this method, I passed F1-F6 so thank you very much to you and your team!!”
You’re very welcome – may the good run of fortune and success continue
By way of thanks … you could pass on the good name of OpenTuition to all your friends and relations that are studying accountancy whether it be at school, university or for any professional organisation
That’s the help we would greatly appreciate from you! 🙂
Thank you for the reply Mr. Mike!
One last question, sir as per your reply, the treatment is to simply deduct the Loan and Interest element. How about Loans that were issued as consideration for the acquisition of the Subsidiary? Do we also deduct this and its interest?
All of my friends use OpenTuition. I recommended it to them few years ago and since then we only use your resources. It is my pleasure to promote the site and its wonderful resources. 🙂
“How about Loans that were issued as consideration for the acquisition of the Subsidiary? Do we also deduct this and its interest?”
Why would you? And how could you?
The loans that we issued as part of the purchase consideration was issued to the PEOPLE that used to own the shares in the subsidiary
I think they would be mightily upset if you started cancelling them!
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