Consolidated Statement of Comprehensive Income in 3 steps

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!

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