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Consolidated Accounts – Income Statements Unit 7 June 20131Dr Vidya kumar.

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Presentation on theme: "Consolidated Accounts – Income Statements Unit 7 June 20131Dr Vidya kumar."— Presentation transcript:

1 Consolidated Accounts – Income Statements Unit 7 June 20131Dr Vidya kumar

2 Consolidation adjustments The retained earnings of the subsidiary brought forward is divided into pre-acquisition profits and post-acquisition profits The group share of pre-acquisition profits are used in the goodwill calculation The share of the Post acquisition profits are brought into the consolidated shareholders' equity June 20132Dr Vidya kumar

3 Consolidation adjustments Revenue and cost of sales are adjusted in order to eliminate intra-group sales and unrealised profits Finance expenses and income are adjusted to eliminate intra-group payments of interest and dividends June 20133Dr Vidya kumar

4 Consolidation adjustments The non-controlling interest in the profit after tax of the subsidiary is deducted to arrive at the profit for the year attributable to the equity holders of the parent June 20134Dr Vidya kumar

5 Consolidation adjustments The amounts paid as dividends to the parent company's shareholders are shown as deductions in the consolidated statement of changes in equity. June 20135Dr Vidya kumar

6 Consolidation adjustments If a subsidiary is acquired during a financial year the items in its statement of comprehensive income require apportioning. June 20136Dr Vidya kumar

7 Consolidation adjustments The important consideration is that the group accounts should only be credited with profits arising whilst the subsidiary was under the parent's control. June 20137Dr Vidya kumar

8 Consolidation adjustments The important consideration is that the group accounts should only be credited with profits arising whilst the subsidiary was under the parent's control. June 20138Dr Vidya kumar

9 Q & A June 20139Dr Vidya kumar


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