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In the Group Spl-Proforma in the lecture videos and the notes of Opentuition,I do have confusion with some adjustments.
Please help me out.In the 3rd adjustment column of Proforma, an adjustment is deducted in the Finance costs section while in the same column of Investment income an adjustment is again deducted from the Investment Income.
What does these two deducted adjustements relate to in individual item of SOPL ? I didn’t get any hints from the lecture too.
Exam is so soon,please help as soon as possible.Hi,
It isn’t seen too regularly in the exam, so don’t panic about it too much, but if the subsidiary has borrowed money from the parent then there will be a finance cost in the sub’s books and investment income in the parent’s books. As this is income and expense that is due between the group companies then it is eliminated upon consolidation, in a very similar way to which we eliminate the intra-group sales.
Good luck with the exam.
Thanks
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