Consolidation (statement of financial position) loan notes

SSaarah7y ago

we have 8% loan notes of subsidiary say 500 it includes parents 60% investment (in loan notes). we eliminate the 60% investment of parent. do we have to make the adjustment for interest on 8% loan notes? if yes what adjustments we have to make?

P2-D2Tutor7y ago#1

Hi, Yes we eliminate the intra-group balances on the SFP and the intra-group interest in the SPL. We would remove the finance cost and the investment income to do so. Thanks

Sshean3y ago#2

Hi what does it really mean to "invest in someones loan stock" ? does it like split the liability of the loan taker by the percentage that we invested in it & why would anyone do that? thanks

P2-D2Tutor3y ago#3

Hi, The issue will sell the loan stock (DR Bank CR Loan Stock) The investor/purchaser/provider of finance will buy or invest in the loan stock (DR Investment CR Bank). Thanks.

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