Preparing the CSOPL

In this lesson

1. 0:00 Consolidated SOP principles and agenda
2. 0:56 Revenue and expenses consolidation process
3. 2:38 Intra-group trading elimination explained
4. 3:29 Unrealised profit adjustment mechanics
5. 5:02 Intra-group trading worked example
6. 7:33 Investment income and dividend elimination
7. 8:15 Profit attribution to parent and NCI
8. 9:45 Profit splitting calculation walkthrough

About this lesson

You'll discover the key principles that apply when combining parent and subsidiary figures, and understand why certain adjustments are essential to represent the group as a single economic entity. The session walks you through the step-by-step preparation process, starting with adding revenue and expenses line by line from both entities. You'll then learn how to eliminate intra-group trading (sales and purchases between group companies) and remove unrealised profits from inventory held at year-end. These adjustments are critical because they prevent double-counting and ensure the consolidated figures reflect genuine external transactions only. A practical worked example shows you how to handle these adjustments in context, including how to calculate and split profit between the parent shareholders and non-controlling interests. You'll also see how to treat investment income (dividends) received from subsidiaries and why these must be removed on consolidation. By the end, you'll understand the complete methodology and be confident tackling CSOPL questions in your exams, whether they involve straightforward consolidations or more complex scenarios with mid-year acquisitions.

Duration: 12m