Students often find a consolidated statement of comprehensive income question more difficult that a consolidated statement of financial position question.  In reality you can complete a consol SCI question in just three easy steps.

3 steps:

1.  Add parent and sub line by line, remembering to:

• time apportion the sub if it’s a mid year acquisition or disposal
• translate the sub average rate if it’s a foreign sub.

2.  Eliminate intercompany transactions, typically:

• intercompany sales (reduce revenue and cost of sales)
• intercompany interest (reduce finance costs and investment income)
• dividends paid by sub to parent (reduce investment income)

3.  Record DIP adjustments and use them to calculate NCIs share of profits & TCI

• D = depreciation adjustment 

          Increase expenses

          Time apportion if mid year

• I = impairment 

          Increase expenses

          Only effects NCI working under the fair value method

• P = PUP.

          Increase cost of sales. 

          Only effects NCI working if the sub is the seller

And that’s it!

Tagged: ACCA F7, ACCA P2, CIMA F2