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finance cost

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › finance cost

Viewing 2 posts - 1 through 2 (of 2 total)
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  • December 5, 2022 at 8:14 am #673440
    Amrit123
    Member
    • Topics: 26
    • Replies: 23
    • ☆

    HI THERE,
    i have one doubt and i hope you will make it clear..

    suppose parent gives loan to subsidiary after acquisition…
    then we reduce both investment income and finance cost while calculating CONSOLIDATED PROFIT AND LOSS…

    BUT
    while calculating net asset of subsidiary we add back the same finance cost to the net asset at reporting date.. is that correct ??

    and while calculating GROUP RETAINED EARNINGS we reduce investment income from parents as well…..am i correct or not….

    i am perplexed and need goodd explanation her….
    thank you in advance…

    December 30, 2022 at 9:21 am #675217
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6473
    • ☆☆☆☆☆

    Hi,

    I think you are over thinking the situation. You have dealt with the interest income and finance cost correctly on the SPL.

    All you need to do on the SFP is adjust for the intra group balances by eliminating them.

    Thanks.

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