Page 249 - FR Integrated Workbook 2018-19

Consolidated statement of profit or loss

Mechanics of consolidation

1.1 Basic principles

 Combine parent and total subsidiary income, expenses and any other
comprehensive income on a line-by-line basis

 Remove any intra-group items, such as trading (revenue and cost of sales) and
dividends received from the subsidiary

 Make consolidation adjustments:

– PUP (increase cost of sales)

– Fair value depreciation (usually cost of sales, but read the question!)

– Impairment (administration costs/operating expenses)

 Show split of profit for the year and total comprehensive income between parent
and non-controlling interest.

The non-controlling interest is calculated (see below), the parent’s
share is the balancing figure.

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