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Can anyone please break down the entire set of adjustments required for intra loan regarding interest on loan in
CONSOLIDATED SOPL & NCI (Profit adjustment working)
CONSOLIDATED SOFP
Adjustments required in “WN2 NET ASSETS” AND “WN5 GROUP RETAINED EARNINGS”.Both cases where Parent lends loan to subsidiary & when Subsidiary lends to parent.
THANK YOU IN ADVANCE.:)Hi,
Each question is unique and needs to be dealt with on its merits. Therefore, there isn’t any simple way to breakdown all of the adjustments in some sort of short cut manner. The key things to remember are:
– The individual accounts of the parent and subsidiary need to be correct first prior to any intra-group adjustments, so this requires the interest income/interest receivable to be recorded in the parent’s books and finance cost/interest payable in the subsidiary’s books. Remember it is usually the parent lending money to the sub, hence why it is usually recorded as such.
– Once this has been done then you can look to eliminate the intra-group interest in the adjustments column in the Group SPL and then eliminate any outstanding receivable/payable in the Group SFP.
Thanks
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