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sir; i have a question. Brigham Co has owned 70% of Dorset Co for many years. It also holds a $5 million 8% loan note from Dorset Co. The financial statements of Dorset Co show a profit for the year ended 31 December 20X6 of $1.3 million.
Brigham Co acquired 80% of the equity shares in York Co on 1 July 20X6. The financial statements of York Co show a profit for the year ended 31 December 20X6 of $2.4 million.
The profits of all group companies accrue evenly across the year.
What is the amount attributable to the non-controlling interests in the consolidated statement of profit or loss?
here the answer is given as 510 , by nci in dorset 270 and nci in york 240. while calculating nci in dorset, they deducted the intra loan interest from dorset`s profit. but i think it is wrong because here bringam have given loan to dorset so dorset incures the interest expense means its profit needs to be increased rather than reducing.
clear me if iam wrong. thanks.I also have problem in this SAME question, I think the intra group interest should rather be ignored. I found many questions in which it was ignored, but In few it was deducted. Please clarify.
This question is from BPP.Hi,
Before we do any intra group elimination we need to ensure the individual accounts are correct first. We therefore need to account for the interest in full first, thus deducting it from the subsidiary books first.
Thanks
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