企業(yè)合并4高財(cái)部分-根據(jù)-ifrs3--Consolidated-income-Statement.課件

1、Session 4Consolidated Income StatementConsolidated Income StatementPrinciples of the consolidated income statementSales, purchases and inventoriesMid-year acquisition1. Principles of the consolidated income statementBasic principle: The consolidated income statement shows the profit generated by all

2、 resources disclosed in the related consolidated statement of financial position, i.e. the net assets of the parent company (P) and its subsidiaries (Ss).From revenue to profit after tax include all of Ps income and expenses plus all of Ss income and expenses (reflecting control of S)After profit af

3、ter tax deduct share of profits due to the non-controlling interest (to reflect ownership)Mechanics of consolidationAs with the statement of financial position, it is common to use standard workings when producing a consolidated income statement:Consolidation scheduleGroup structure diagramNet asset

4、s of subsidiary at acquisition (required for goodwill calculation)Goodwill calculation (required where an impairment is to be charged to profit)Non-controlling interestConsolidation scheduleThis schedule is used as a tool to add together Ps and Ss income and expenses and make any necessary. It inclu

5、des:100% of Ps income and expenses100% of Ss income and expenses (unless a mid-year acquisition has occurred in which case this is time apportioned)Cont.PSAdjTotalTime apportioned if mid-yearRevenuexx(x)XCost of sales(x)(x)x(x)Operating expenses(x)(x)(x)(x)Finance cost(x)(x)(x)Income tax(x)(x)(x)Pro

6、fit after taxXXXImpairment of goodwillOnce any impairment has been identified during the year, the charge for the year will be passed through operating expenses, however always follow instructions from the examiner.Total impairment to date is an adjustment in retained earnings in the consolidated st

7、atement of financial position.Non-controlling interestThis is calculated as:NCI% x subsidiarys profit after tax (taken from Ss column of consolidation schedule).Illustration 1 Basic consolidated income statementPoplin acquired, several years ago, 80% of the ordinary share capital of Silk. Their resu

8、lts for the year ended 30 November 20 x4 were as:Prepare the consolidated income statement for the year ended 30 November 20 x4.PS$000$000Sales revenue8,5002,200Cost of sales and expenses(7,650)(1,980)Trading profit b4 tax850220Income taxes(400)(100)450120DividendsA payment of a dividend by S to P w

9、ill need to be cancelled. The effect of this on the consolidated income statement is:Only dividends paid by P to its own shareholders appear in the consolidated financial statement. These are shown within the consolidated statement of changes in equity which you will not be required for this module.

10、Any dividend income shown in the consolidated income statement must arise from investments other than those in subsidiaries or associates. This will be will covered later)The NCI in S is calculated on the profit after tax and before dividends. The figure therefore includes the NCIs share of Ss divid

11、ends and Ss retained earnings.Fair valueIf a depreciating non-current asset of the subsidiary has been revalue as part of a fair value exercise when calculating goodwill, this will result in an adjustment to the consolidated income statement.The subsidiarys own income statement will include deprecia

12、tion based on the value the asset is held at in the subsidiarys own SFPThe consolidated income statement must include a depreciation charge based on the fair value of the asset, included in the consolidated SFPExtra depreciation must therefore be calculated and charged to an appropriate cost categor

13、y within the consolidation schedule.Test your understanding 1The income statement for Paddle and Skip for the year ended 31 August 20 x4 are shown below. Paddle acquired 75% of the ordinary share capital of Skip several years ago.Prepare the consolidated income statement for the year. Ignore goodwil

14、lPaddleSkip$Sales revenue2,400,000800,000Cost of sales and expenses(2,160,000)(720,000)Trading profit240,00080,000Investment income:Dividend received from Skip1,500Profit before tax241,50080,000Tax(115,000)(38,000)Profit for the year126,50042,0002. Sales, purchases and inventoriesThe effect of intra

15、-group trading must be eliminated from the consolidated income statement.Sales and purchaseSuch trading will be included in the sales revenue of one group company and the purchase of another.Consolidated sales revenue = Ps revenue + Ss revenue intra-group salesConsolidated cost of sales = Ps COS + S

16、s COS intra-group salesThe deduction of the intra-group sales in both cases should be shown in the adjustments column of the consolidation schedule.InventoryIf any goods sold intra-group are included in closing inventory, their value must be adjusted to the lower of cost and net realisable value (NR

17、V) to the group (as in the CSFP)The adjustment for unrealised profit should be shown as an increase to cost of sales in the sellers column in the consolidation schedule.Illustrate 2 Sales, purchase and inventoriesGiven below are the income statements for Paris and its subsidiary London for the year

18、ended 31 December 20 x5.ParisLondon$000$000Sales revenue3,2002,560Cost of sales(2,200)(1,480)Cross profit1,0001,080Distribution costs(160)(120)Administration expenses(400)(80)440880Investment income160-600880Taxation(400)(480)Net profit for the year200400Cont.Paris paid $1.5m on 31 December 20 x1 fo

19、r 80% of Londons ordinary share capital of $800,000. The balance on Londons retained earnings was $600,000 at that time.Goodwill impairments at 1 January 20 x5 amounted to $152,000. A further impairment of $38,000 was found to be necessary at the year end. Impairments are included within administrat

20、ive expenses.Paris made sales to London, at a selling price of $600,000 during the year. Not all of the goods had been sold externally by the year end. The profit element included in Londons closing inventory was $30,000.The figure for investment income in Pariss income statement comprises the paren

21、t companys share of the subsidiarys total dividend for the year.The figure for investment income in Pariss income statement comprises the parent companys share of the subsidiarys total dividend for the year.Prepare a consolidated income statement for the year ended 31 December 20 x5 for the Paris gr

22、oup.Test your understanding 2On 1 January 20 x9 Zebedee acquired 60% of the ordinary shares of Xavier.The following income statements have been produced by Zebedee and Xavier for the year ended 31 December 20 x9.ZebedeeXavier$000$000Sales revenue1,260520Cost of sales(420)(210)Gross profit840310Distr

23、ibution costs(180)(60)Administration expenses(120)(90)Profit from operation540160Investment income from Xavier36-Profit before taxation576160Taxation(130)(26)Profit after taxation446134Cont.During the year ended 31 December 20 x9 Zebedee had sold $84,000 worth of goods to Xavier. These goods had cos

24、t Zebedee $56,000. On 31 December 20 x9 Xavier still had $36,000 worth of these goods in inventories (held at cost to Xavier).Prepare the consolidated income statement to incorporate Zebedee and Xavier for the year ended 31 December 20 x9.Note: Goodwill on consolidation had not been impaired.Interes

25、tIf loans are outstanding between group companies, intra-group loan interest will be paid and received.Both the loan and loan interest must be excluded from the consolidated results.The relevant amount of interest should be deducted from group investment income and group finance costs through the ad

26、justment column of the consolidation schedule.Transfers of non-current assetsIf one group company sells a non-current asset to another group company the following adjustments are needed in the income statement.Any profit or loss arising on the transfer must be deducted from the appropriate category

27、within the sellers column in the consolidation schedule.The depreciation charge must be adjusted (again in the sellers column of the schedule) so that it is based on the cost of the asset to the group.3. Mid-year acquisitionIf a subsidiary is acquired part way through the year, then the subsidiarys

28、results should only be consolidated from the date of acquisition, i.e. the date on which control is obtained.In practice this will require:Identification of the net assets of S at the date of acquisition in order to calculate goodwill.Time apportionment of the results of S in the year of acquisition

29、. For this purpose, unless indicated otherwise, assume that revenue and expenses accrue evenly.After time-apportioning Ss results, deduction of post acquisition intra-group items as normal.Illustration 3 Mid-year acquisition The following income statements were prepared for the year ended 31 March 2

30、0 x9.EthosPathos$000$000Sales revenue303,600217,700Cost of sales(143,800)(102,200)Gross profit159,800115,500Operating costs(71,200)(51,300)Operating profit88,60064,200Dividends received and receivableQuoted investments2,8001,200Profit before tax91,40065,400Taxation(46,200)(32,600)Profit after tax45,

31、20032,800Cont.On 30 November 20 x8 Ethos acquired 75% of the issued ordinary capital of Pathos.The profit of both companies are deemed to accrue evenly over the year.Prepare the consolidated income statement for the year ended 31 March 20 x9. Ignore goodwill.Test your understanding 3Set out below are the draft income statements of Smiths and its subsidiary company Flowers for the year ended 31 December 20 x7.On 1 January 20 x6 Smiths purchased 75,000 ordinary shares in Flowers at a cost of $170,000. The issued share capital of Flowers is 100,000 $1 ordinary shares. At that d