Consolidated statement of profit or loss and other comprehensive income - part 1

In this lesson

1. 0:00 Group consolidation and statement of profit and loss
2. 0:21 Three-part learning plan overview
3. 1:21 Basic consolidation principles explained
4. 2:09 Control and ownership in group accounts
5. 4:08 Calculating noncontrolling interest share
6. 6:27 Worked example: NCI calculation

About this lesson

You'll discover why we add together 100% of both the parent and subsidiary's income and expenses, and how to correctly split the resulting profit between the group shareholders and non-controlling interests at the bottom of the statement. The video covers three key areas that directly affect group consolidations: basic consolidation principles, impairment and inter-group trading, and fair values with mid-year acquisitions. These are the same concepts you've already studied in group statement of financial position chapters, but they apply differently to the profit or loss statement. Understanding this connection will help you see how the same adjustments flow through both major group documents. You'll work through the crucial calculation of non-controlling interest profit share, which differs from the cumulative figure shown on the statement of financial position. The video shows you how to take the subsidiary's profit after tax and multiply it by the non-controlling interest percentage—a separate working that sometimes requires adjusting the subsidiary's profit before applying this calculation. This is essential knowledge for papers SBR and F2, where group consolidations are core to the exam. By the end of this lesson, you'll understand how to reflect both control (by consolidating 100% of figures) and ownership (by splitting profit appropriately), giving you confidence to tackle more complex consolidation scenarios in your studies.

Duration: 8m