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In a question in bpp the nci share of impairment was deducted from the W4B of NCI for p and l this seems correct but I didnt saw this impairment adj in your solutions or may b i have that question?
Inter company:
Question extracts…
Port has many investments, but before 20X4 none of these investments meet the criteria for consolidation as a subsidiary. One of these older investments was a $2.3m 12% loan to Alferd which was made in 20W1 and is due to be repaid until 20Y6
INCOME STATEMENT FOR Y/E 31st DEC 20X4 $’000. $’000
Port. Alfred
Interset on loan to Alferd 276 —
Finance cost — 276STATEMENT OF FINANCIAL at 31st DEC 20X4
Assets
NCA
Loan to Alfred 2300
Loan from Port. 2300Plz give me the treatment in consolidated Income Statement and consolidated financial position and also explain it plzzz thanks in advance…
What consolidated statements? You say that there are no subsidiaries. So why am I consolidating? And what am I consolidating?
Sorry for that confusion now i have repharsed the question
Port Acquired Alferd on 1st Nov 20X4 and
a $2.3m 12% loan to Alferd which was made by Port in 20W1 and is due to be repaid until 20Y6
INCOME STATEMENT FOR Y/E 31st DEC 20X4
Port(Parent). Alfred(subsidiary)
Interest received and recognized from Alferd 276
Finance cost charged by Alferd 276STATEMENT OF FINANCIAL at 31st DEC 20X4
Assets
NCA
Loan to Alfred 2300
Loan from Port. 2300Plz give me the treatment in consolidated Income Statement and also explain it plzzz thanks in advance…
It seems from your post that Alfred has been a subsidiary for only 2 months of the year. So time apportionment will apply to the Alfred figures when preparing the consolidated profit or loss account.
10 / 12 of the interest ($230) from Alfred will be included by Port as loan interest received.
2 / 12 of that interest ($46) will be cancelled against the time-apportioned Alfred results that show loan interest paid of $46 ($276 time apportioned)
Is that ok?
ok thanks and about this…
In a question in bpp the nci share of impairment was deducted from the W4B of NCI for p and l this seems correct but I didnt saw this impairment adj in your solutions or may b i have that question?
nci doesn’t appear in the profit or loss! In my working W4B, the nci is interested in their share of this year’s subsidiary profit after tax. There is no goodwill impairment in the subsidiary’s profit or loss account so the allocation of the goodwill impairment to the nci is via changes in equity. But changes in equity will not be asked in a consolidation question in F7
Because it was only the post-acquisition element that features in the consolidation calculations. It’s only the 46 post acquisition that needs to be cancelled out because before that the two entities were unrelated
OK?
Sir, in this question, the profit for the year of subsidiary is 96.
Do we need to adjust for the intra group loan interest in the profit of the subsidiary?
In so far as a statement of financial position is concerned, the cancellation of loan interest paid and received within the group is relevant only to the extent that there are amounts outstanding at the year end and included within liabilities and assets
For a statement of profit or loss question, the expense of intra-group interest and the corresponding income of intra-group interest is cancelled and thus, if there is no other loan interest payable or receivable from outside the group, there is no line item in the consolidated statement of profit or loss neither for the expense nor for the income
But this exercise of cancellation is purely for presentation purposes. The figure for the subsidiary’s results is not adjusted
How long did it take you to locate this thread? The last post on this was 15 months ago! In future it would be a big time-saving for you simply to open a new thread with an appropriate heading!
OK?
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