C. Group Accounting Flashcards
If a subsidiary is acquired mid-year, how are the results consolidated on the CSPLOCI?
only post-acquisition results consolidated
-time appropriated
how are intra-group dividends dealt with int the CSPLOCI?
dividends should be eliminated from investment income
how is goodwill impaired on the CSPLOCI?
FV method: NCI share of profit adjusted to reflect their share of loss
Prop method:all the goodwill impairment is allocated to the parents so no NCI adjustment
how are intra-group balances eliminated form the CSPLOCI?
balance deducted from revenue and cost of sales
PUP(unrealised profit) added to COS
-if S is seller, adjust NCI to reflect their share of PUP
how are depreciation adjustments made to CSPLOCI?
adjustment made to reflect FV adjustment(deduct from COS)
if depreciation charge related to sub assets, adjustment should be reflected in the calculation of profit attributable to the NCI
what additions are made to the CSFP and CPLOCI for an associate?
CSFP: investment in associate
CPLOCI: share of profit of associate (time app.)
why are intergroup transactions between P and A not eliminated from consol accounts?
because the A is outside the group
-not 100% consolidated
what adjustments are eliminated from group accounts from the A?
PUP: unrealised profits
dividends
what is the CSFP and CSPLOCI PUP adjustment if a parent sells to associate?
CSFP:
Dr RE
Cr investment in associate (cant reduce A inventory so reduce inv)
CPLOCI:
increase cost of sales
what is the CSFP and CSPLOCI PUP adjustment if an associate sells to a parent?
CSFP:
Dr RE
Cr inventory
CPLOCI:
reduce share of profit of associate
What does the statement of changes in equity show?
the movement in the equity section of the statement of financial position from the previous reporting date to the current reporting date
who is equity split between on the CSOCE?
parent and NCI shareholders
what are the 2 columns of the CSOCE?
- changes in equity attributable to parent shareholders
- changes in equity attributable to NCI shareholders
what is the parent shareholders column in the CSOCE made up of?
share capital
share premium
retained earning and other reserves
where does the parents shareholders equity b/f in the CSOCE come from?
group reserves calculation but equity instead of reserves and post acqn is up until b/f date
where does the NCI shareholder equity b/f figure in the CSOCE come from?
usual NCI working
where do the comprehensive income figures come from for CSOCE?
foot of CSPLOCI where it is split between parent and NCI shareholder
what does the closing balance in the NCI column in the CSOCE agree to?
NCI equity balance in the consolidated statement of financial position
why do the SFP and SPLOCI not show how the business has generated and used cash in the accounting period?
they are prepared on an accruals basis
what do SCF enable users to assess?
the liquidity, solvency and financial adaptability of a business
what does ‘cash’ consist of?
cash in hand and deposits repayable upon demand, less overdrafts
-includes cash held in a foreign currency
what are ‘cash equivalents’?
short-term, highly liquid investments that are readily convertible into known amounts of cash and are subject to an insignificant risk of changes in value
what are ‘cash flows’?
inflows and outflows of cash and cash equivalents
what are the 3 classifications of cash flows in CSF?
cash flows from operating activities
cash flows from investing activities
cash flows from financing activities