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Dear Sir,
In the consolidated PL why we deduct the dividends received from an associate from Group investment income? After all, we consolidate the subsidiary’s figures only, we do not add the associate’s figures. So, does this exception applies only to dividends received from the associate?
Hi,
When we equity account for the associate we account for our share of the associates profit for the year in the consolidated accounts. The associate will have paid out a dividend from this profit that we have received and included within the investment income figure. If we do not then remove the share of the dividend that we have received from the associate then we will be double counting as that share of the dividend is in the profit figure we have equity accounted for.
Hope that clears it up for you.
Thanks,
Chris
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