Consolidation adjustments

Question 1

Intra group trading
SPL

Answer 1

Remove sales from Revenue

Remove purchases from COS

Question 2

Goodwill impairment
SPL

Answer 2

Proportionate method - Charge in parent column

FV method - Charge in Sub column

Question 3

Intragroup interest

Answer 3

Cancelled out in Adj column

Question 4

Inventory PURP
SPL

Answer 4

Increase to COS in sellers column

Question 5

Transfer for NCA
SPL

Answer 5

Any profit/loss on transfer deduct in sellers column

Depn- as if not sold

Question 6

Dividend from sub to parent

Answer 6

Deduct from parent finance income the amount that was paid from s to p

Question 7

Fair value adjustment

Answer 7

SPL - Extra Depn charge in Sub column of W2

SFP - Uplift and Depn in net assets

Question 8

Inventory PURP
SFP

Answer 8

P - S:
Dr Group RE
Cr Group Inv

S - P:
Dr Sub RE
Cr Group Inv

Question 9

Cash in transit

Answer 9

Treat as if been received

Question 10

Consideration paid

Answer 10

Cash
Deferred cash - Present value and unwind liability each year

Shares - Market value at acq date
Deferred shares - Market value at acq date

Contingent cash - provision
Contingent shares - shares to be issued

Question 11

NCI calc - proportionate method

Answer 11

Cost
NCI at acquisition
Less Net assets at acq