Page 349 - F1 Integrated Workbook STUDENT 2018

Consolidated Statement of Profit or Loss and Other Comprehensive
Income

Consolidated Statement of Profit or Loss

and Other Comprehensive Income

The principles of consolidation are continued to the statement of profit or loss
(CSPL).

A statement of profit and loss reflects the income and expenses generated by the net
assets reflected on the statement of financial position.

Since the group controls the net assets of the subsidiary, the income and expenses
of the subsidiary should be fully included in the consolidated statement of profit and
loss, i.e. add across 100% parent plus 100% subsidiary.

To reflect that the parent may not own 100% of the subsidiary, the profit for the year
will be split between the amount attributable to the parent shareholders and the non-
controlling interest shareholders (NCI).

It is important to remember you should only consolidate the subsidiary since
acquisition when completing the subsidiary column of the proforma.

A standard approach to preparing consolidated financial statements is adopted within
the manual in order to aid the learning process. However, assessment on this will be
largely in the form of OTQ's which will only test one or two principals at a time. You
will not be expected to prepare consolidated financial statements in totality. It is
therefore important you understand the accounting entries behind the workings and
adjustments.

339