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Forums › ACCA Forums › ACCA FR Financial Reporting Forums › PURP within NCI calculation for consolidated P&L
Hi,
I have the following statement:
1. After the acquisition of Sentinel of 01.10.20×0, P transferred to S an item of plant with a carrying amount of 4 millions at an agreed value of 5 millions. At this date the item had a remaining life of 2.5 years. Prodigal had included the profit on this transfer as a reduction in its depreciation costs.
Why this depreciation should be added back to the calculation for NCI?
Thank you
I believe that the excess depreciation is in the subsidiary’s books and hence the need to allocate the NCI (which is a separate ‘entity’) its share. Remember, the reason we would eliminate it from the consolidated SOPL is because we treat the parent and subsidiary as one entity; and there cannot be transfers above carrying amount.