Financial Reporting- BPP Question

Hi,

There is a question (Q255) on the BPP FR Revision Kit which has confused me for a while. I have had a look at the solution and I can’t seem to understand why I am wrong. The question is as follows:

“P Ltd has owned 70% of S Ltd for many years. It also holds a £5M 7% loan note from S Ltd. One of S Ltd’s non-current assets has suffered an impairment of £50,000 during the year. There is a balance in the revaluation surplus of S Ltd of £30,000 in respect of this non-current asset. The impairment loss has not yet been recorded.

The financial statements of S Ltd shows a profit for the year of £1.3M.
What is the amount attributable to the Non-controlling Interest in the consolidated statement of profit or loss?”

My issue is regarding the treatment of the £5M 7% loan note as I thought you would remove the Investment income of P (8% of £5M= £400,000) and you would also reduce the finance costs of S Ltd ( 8% of £5M). However, in the solution only the intragroup interest of £400,000 is deducted. I believed that I would deduct the investment income and then deduct the finance cost by the same amount. The final answer given in the solution is £264,000.

Can someone please explain where I am going wrong?