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consolidation

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › consolidation

  • This topic has 1 reply, 2 voices, and was last updated 6 years ago by AvatarP2-D2.
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  • August 22, 2019 at 1:37 pm #528414
    Avatarsguha
    Participant
    • Topics: 64
    • Replies: 42
    • ☆☆

    if parent co. gave a 10% interest loan to subsidiary……we will remove the loan from the asset & liability side of the consolidated financial position………….but how to make adjustment of the interest expense for subsidiary………..is it in W2 of net asset of subsidiary we will increase the profit of subsidiary post acquisition by amount of interest expense and in W5 we will reduce the Parent’s r.e by interest income against those loan

    August 27, 2019 at 8:32 pm #539536
    AvatarP2-D2
    Keymaster
    • Topics: 4
    • Replies: 7232
    • ☆☆☆☆☆

    There is no adjustment to make to the profit/loss as the group profit is not effected by the equal changes to the finance cost and investment income.

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