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Introduction
Consolidated statement of profit or

loss and comprehensive income

(CSOPL) combine the holding
companys
and
subsidiary
companies results
Any
intra-group
transaction
is
eliminated.

Accounting Techniques

Combines similar items on a line-by-line basis

even though the holding company never owned

100% interest in subsidiary. Example Sales of
parent and sales of subsidiaries; expenses of
parent and expenses of subsidiaries.
The interest of NCI will be disclosed separately
in the statement of profit or loss as a separate
item.
Any appropriation of profit (dividends and
transfer to reserves) will be disclosed in the
statement of changes in equity.
Example 1, pg. 470
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Intra-Group Dividends and

Intra-group dividends dividends paid and
Transactions

proposed by subsidiary will be recognised by the

parent in the statement of profit or loss of in its
separate statement .
In the Consolidated State of Profit or Loss
dividends from subsidiary are eliminated.
Exclude intra-group transactions and disclose only
sales to parties outside the group only and
Expenses actual expenses incurred by the group.
If intra-group sales at price above cost price, then
unrealised profit on goods unsold should be
eliminated from the groups profits.

Example 3, pg. 474

Preference Shares in
If the parent did not hold any preference shares in
Subsidiary

subsidiary all preference dividends is attributed to

non-controlling shareholders interest.
If parent holds some or all preference shares in
subsidiary, the amount of dividends attributable to
shareholders other than the holding company will
form part of the non-controlling shareholders
interest.
The amount of preference dividends to NCI will be
the amount declared or paid during the year.
For cumulative preference dividend the dividends
will be the full amount for the year regardless
whether they are declared or not. Illustration 1
and Example 4
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Acquisition of Subsidiary
Profit earned
by the subsidiary after
During
the Year

it
becomes a subsidiary will be part of the
current years distributable profits of the
group. Therefore the results of subsidiary will
be consolidated from the date of acquisition
only.
If the preference share were acquired during
the year, any preference dividends are for the
period before the purchase of the preference
shares are excluded from the groups profit.
If the dividends were paid before the ordinary
shares were acquired, the acquirer would not
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have received the dividends.

Impairment
Goodwill
2 methods:
The goodwill measured will be partial and related

to parent only, if NCI is measured based on the fair

value of the net assets of the subsidiary.
Any impairment of goodwill will be charged
against parents share of profit.
The goodwill measured at full value, if the NCI is
measured based on the fair value of NCI on
acquisition date.(based on share price)
Any impairment of goodwill will be charged to
parent and NCI based on the proportion to
their holding interest.
Example 5 (483) and Example 6 (487)
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