Consolidated statement of profit or loss and other comprehensive income - part 3

In this lesson

1. 0:00 Group consolidation fundamentals
2. 0:25 Time apportioning subsidiary results
3. 1:33 Depreciation vs impairment treatment
4. 2:29 Inter-group transactions and cancellation
5. 3:41 Calculating noncontrolling interest share
6. 6:19 NCI profit calculation step by step
7. 10:08 Mid-year acquisition consolidation example
8. 12:44 Group cost of sales consolidation
9. 15:10 Consolidation techniques summary

About this lesson

You'll master the critical distinction between time-apportioning certain items (like depreciation and subsidiary profits) and others that occur at a point in time (like goodwill impairment), plus how to eliminate inter-group transactions and adjust for unrealised profit. This is essential for ACCA Strategic Business Reporting (SBR) and CIMA Strategic Case Study (SCS) papers, where mid-year acquisitions and group consolidation frequently appear. The lesson works through two detailed examples showing how to calculate the non-controlling interest share of profit when a subsidiary joins the group partway through the year. You'll see exactly which adjustments get time-apportioned (subsidiary income and expenses, fair value depreciation) and which don't (impairment losses, inter-group sales), along with the practical mechanics of eliminating intra-group transactions and handling unrealised profit. The direction goods travel between parent and subsidiary matters too—you'll learn why unrealised profit adjustments affect different profit figures depending on whether the parent or subsidiary made the sale. By the end, you'll confidently handle the complexities of mid-year acquisitions in group consolidations, including calculating post-acquisition profits correctly and ensuring your non-controlling interest calculations reflect only the period the subsidiary was actually owned. This builds directly on earlier consolidation work and prepares you for exam questions combining acquisition timing, fair values, and inter-group trading.

Duration: 16m