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
Ask the Tutor ACCA FR
consolidation
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.
Sign in to reply to this topic.