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In preparing the group SOFP, why are all the assets and liabilities of the parent and subsidiary added together on a line-by line basis; if the parent owns say 80% of subsidiary’s ordinary shares? Does this mean the parent also owns all the assets and liabilities of the subsidiary?
The parent controls the subsidiary because they own more than 50%.
We show all of the assets and liabilities of the group, and show separately how much of it belongs to others (the non-controlling interest).
I do suggest that you watch my free lectures. The lectures are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well.
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