why interest paid to parent by subsidiary not added back to subsidiary's profit when calculating profits attributable to nci? Thanks in advance.
Ask the Tutor ACCA FR
intragroup finance cost
11y ago#1Because, so far as the subsidiary is concerned, that interest is a true finance cost.
What you are apparently confusing is the ignoring of intra-group interest paid / received for consolidation purposes.
Adjustments are NOT put through against the respective PorLs. The ignoring of these amounts is a presentation point only - it would be stupid to add as a finance charge AND as a finance income an amount payable within the group. But each separate company's PorL shows the correct position. Only on consolidation do we ignore these amounts
OK?
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