the parent co. invested in loan notes of subsidiary co. post acquisition…….so while preparing consolidated profit/loss st. we remove the finance cost and at the same time investment income related to that loan notes…….no issue regarding that
but when time comes for at the end doing workings of NCI share of profit attributable to……..we are not adding back the finance cost being charged to post-acq profit…..while we are adjusting other items like depreciation , subsidiary’s unrealised profit….
a question in kaplan kit 2019 PANDAR……the finance cost related to loan notes…..its not added back at working 4 for nci calculation
This is because there is no net effect on the profitability of the group in adjusting the finance costs and investment income by the same amount, hence no adjustment required.