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Chapter 19

On the proforma:

 pro-rate the subsidiary’s results if it has been acquired mid-year

 eliminate intragroup incomes and expenses, unrealised profits on intra-group
transactions, as well as any dividends received from the subsidiary.

3.2 Share of profit of associate

Associates are accounted for using the equity method.

A single figure will be presented in the consolidated statement of profit or loss,
calculated as follows:

$m
P’s % of associate’s profit after tax X
Current year impairment (X)
––––
Share of profit of associate X
––––

In OCI, the group will show its share of the associate’s OCI (if applicable).

Illustrations and further practice

You can now attempt Illustration 2 from Chapter 19.

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