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CONSOLIDATIONS AFTER THE DATE OF ACQUISITION





            Intragroup transactions not subject to tax






            • If an intragroup transaction contains no unrealised

                profit element (or unrealised loss element), and it does


                not affect the taxable income (or assessed loss) of the

                companies concerned, the transaction will not have any

                tax implications.


            • If a parent grants an interest-bearing loan to its

                subsidiary, the interest expense of the subsidiary will

                contra against the interest income of the parent in the


                consolidated statement of comprehensive income.


            • Thus the net effect of the interest transaction is zero;

                and it will have no effect on the taxable income or

                assessed loss of the group.







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