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Hi mike this is concerning the consolidation statement of profit and loss
While attributing the profit we always calculate the nci and then the group is balancing ! So suppose the profit for subsidiary is 5000, but there is an unrealized profit of 1000! So when we attribute it to the nci why do we remove that 1000! According to the normal basis the nci should be getting 20% of 5000! Why do we remove it as what is nci issue for thatWhen we consolidate, we do so for the benefit of the parent’s shareholders and the results of the consolidation then “belong” to the parent’s shareholders with a little bit “belonging” to the nci
If we have only brought in the subsidiary’s results AFTER the adjustment for the pup, we can only “give” to the nci their share of the subsidiary’s results that have been included within the consolidation
Does that make it any clearer for you?
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