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Hi john 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 that
Assuming that it was the subsidiary that sold the goods to the parent, and that the parent has the goods in inventory, then it is the subsidiary that recorded the profit on those goods. In the consolidated statements that profit is removed from the groups retained earnings, and therefore the NCI’s share of the retained earnings in the consolidated statements is their share of the profits less the PURP.
The NCI that we are showing in the consolidated statements is their share of the profit (and therefore retained earnings) that is being shown in the consolidated statements.
I assume that you have watched my free lectures on this, but if not then I really do suggest that you do watch them.