CONSOLIDATED

STATEMENT OF PROFIT OR
LOSS
AND OTHER
COMPREHENSIVE INCOME
(CSOPLOCI)
 The Consolidated Statement of Profit or Loss and Other
Comprehensive Income (SOPLOCI) show the results of
income and expenses from operations of the group
(parent and subsidiaries) with third parties that are
external to the group of entities.

CSOPLOCI is prepared by the holding company to

INTRODUCTION incorporate the operating results of both the holding
company and its subsidiaries.

The function of CSOPOLOCI is to show a true and fair

view of the earnings of the group for the period, as a
single operating unit.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OCI

 The effects of all the intra group
transactions must be eliminated in the
CSOPLOCI.

INTRODUCTION For examples:

(cont.)
• Intra-group sales/purchases (if the buyer still hold the
item purchased as at the reporting date)
• Unrealized profits on unsold goods (both closing
inventory and opening inventory).
• Intra-group service income and expenses
• Dividend and interest from subsidiary
• Unrealized profits or loss arising on intra-group
sale/transfer of non-current assets (e.g. PPE)
• Any related depreciation adjustments
CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OCI
o Full consolidation is done.
o CSOPOLOCI combines items such as sales, cost of sales,
income, expenses and taxation, line-by-line basis regardless
even if subsidiary may not be a 100% controlling interest in
the subsidiary.
o All items of income, expenses and taxation are combined
even though non-controlling shareholders have interest in
the operation of subsidiary.
ACCOUNTING
o The portion of the results attributable for non-controlling TECHNIQUES
shareholders (the NCI) will be disclosed in the CSOPLOCI
as a separate item.
o Any appropriation of profits, for example, dividends
(ordinary and preference) and transfer to reserves will be
disclosed in the consolidated statement of changes in equity
(CSOCIE).

CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OCI

For Partial Goodwill
o If NCI value is measured at proportionate share of Fair
Value of Net Assets (FVNA):
✓ The impairment loss of goodwill does not affect profit
attributable to NCI.
ACCOUNTING
✓ Impairment loss (IL) and Bargain Purchase will be charged TECHNIQUES
against parent's share of profit only.
o Impairment loss (IL) on goodwill:
(cont.)
✓ Impairment loss for the current year is written off as expense
in CSOPLOCI.
Refer Ex1 (pg466)
✓ Impairment loss for the prior year, where the date of
acquisition (DOA) of subsidiary is has more than a l year is
written off against Retained profit brought forward of the
parent.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OCI

 INTRA-GROUP
TRANSACTIONS
CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OCI
 INTRA-GROUP DIVIDENDS & INTERESTS

o Interest and dividends paid and proposed/payable by the subsidiary will be recognized
accordingly by the parent and disclosed in its own separate SOPL.
o For consolidation purpose in the CSOPLOCI, the share of dividends and interests from
subsidiary are eliminated as whole of subsidiary's profits is added to that of the holding
company.
o To avoid double counting of dividend and interest from subsidiary in CSOPLOCI, the
amount of interests and dividend income receivable from subsidiary that have been
recognized by the holding company ( as an investment income must also be cancelled
(eliminated).

CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OCI

 INTRA-GROUP DIVIDENDS
& INTERESTS (cont.)
o Investment income (dividend and interest income) shown in CSOPLOCI must
arise from investments in external third parties other than those in subsidiaries or
associates.

o The amount of profits available for distribution by Holding/Parent is its own

realized profits including income from all its investments, which comprises of the
parent's share in the dividends paid and proposed by the subsidiary.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OCI

 INTRA-GROUP TRANSACTIONS/
EXPENSES / INCOME
o Expenses recognized such as purchases and expenses recognized for consolidation purposes
are those paid /due to outside parties other than member companies only, for use of resources
and services.

o Intra- group services due to or from member companies are eliminated in the CSOPLOCI.

o Intra- group services recognized may include charges on administration, management,

consultancy, information technology, finance, distribution services etc

o Refer example 3 (page 470)

CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OCI

 ACQUISITION
METHOD
CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OCI
 ACQUISITION DATE OF SUBSIDIARY
Acquisition in the Prior Year: More Than a Year - DOA > 1 year
1/1/20X8 1/1/20X9 31/12/20X9
DOA

CFYE
Prior year Post acquisition period
How many years? = 2 years
From 1.1. 20×8 to 31.12.20×9

Consolidation in current year as per CSOPL for the Whole/full consolidation of income and expenses of
year ended 31.12.20x9 subsidiary in current year 20x9
12 months = 1 year
Group Retained Profits b/f Holding + Holding's proportionate share of
-Balance as at 1.1.20x9 subsidiary's post acquisition profit in prior year (PY).
E.g. 20×8
CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OCI
 ACQUISITION DATE OF SUBSIDIARY
Acquisition at the BEGINNING of the Year (DOA = 1 year)

1/1/20X9 31/12/20X9
DOA

CFYE
Pre acquisition period - Post acquisition period = 1 year
the prior years From 1.1.20×8 to 31.12.20×9

Consolidation in current year as per CSOPL for • Whole/full consolidation of income and expenses in
the year ended 31.12. 20x9 current year 20×9
12 months = 1 year
Group Retained Profits b/f • Holding only
-Balance as at 1.1. Year 9 (as per CSOCIE) • Holding does not have any share of subsidiary's pre
acquisition profit ( those in prior years)
CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OCI
 ACQUISITION DATE OF SUBSIDIARY
Acquisition of subsidiary DURING the CY:
DOA< 1 year / Mid year acquisition
1/1/20X9 1/1/20X9 31/12/20X9
DOA

CFYE
Pre acquisition period – Post acquisition period < 1 year (9months)
3/12 From 1/4/20x9 to 31/12/20x9

Consolidation in current year as per • Consolidation of income and expenses of subsidiary in post
CSOPLOCI for the year ended 31.12. 20x9 acquisition period based on time-apportion in the respective
current year.
• 9 months or time proportion→ 9/12
Group Retained Profits b/f • Holding only
-Balance as at 1.1. Year 9 (as per CSOCIE) • Holding does not have any share of subsidiary's pre acquisition
profit ( in prior year and in current year: before the DOA)
CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OCI
 ACQUISITION METHOD
o Preparation of CSOPLOCI uses acquisition method as per MFRS 3 Business Combinations.

o Only post-acquisition profits (or losses) of the subsidiary are to be included in group's
retained profit.

o The results of the subsidiary before its acquisition date will not be consolidated

o Any share of the prior year's profits (or losses) of subsidiary (for acquisition period more than 1
year) are confined to holding's share of post acquisition profits of subsidiary only.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OCI

 ACQUISITION OF A SUBSIDIARY
DURING THE YEAR
o A business combination may take place during the current year.

o For ACQUISITION of subsidiary DURING THE CURRENT FINANCIAL YEAR (mid-year

acquisition), the parent will combine and consolidate only post acquisition results of
subsidiary according to the time apportionment from the date it becomes a subsidiary.-

o The subsidiary's current year profit will form and be shared as the group profit. The result of
profit earned shared after it becomes a subsidiary to that parent.

o For mid-year acquisition, the parent should make consolidation adjustments for the post
acquisition intra-group transactions that arise after DOA.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OCI

 PREFERENCE
SHARES
CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OCI
 PREFERENCE SHARES IN SUBSIDIARY
o If subsidiary has issued the preference share capital (PSC), the parent may have acquired some or
even all the subsidiary's PSC.

o The profits attributable to the preference shareholder must be identified, which will be the
preference dividend declared and payable.

o If the preference share were acquired during the year, the preference dividends due for the
period prior to the purchase are excluded from group's profit.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OCI

PREFERENCE SHARES IN SUBSIDIARY (cont.)

o If the parent does not acquire any of the PSC of the subsidiary, all profits in the form of
preference dividends due to preference shareholders will belong to the Non-Controlling Interest
(NCI) only.

o Preference dividend belonging to NCI must be set aside as portion attributable to NCI.

o For Cumulative preference shares - full amount of dividends for the year must be provided
for, regardless whether they are declared or not.

o Refer Illustration 1&2 (page 475) & Example 4 (page 475).

CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OCI

 STEPS TO PREPARE
CSOPL&OCI
CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OCI
Steps to Prepare CSOPL&OCI
A) PREPARE WORKING
1. Determine controlling interest % acquired by Holding in OSC and its proportion acquired in PSC and DEBENTURE
2. Determine the Date of Acquisition (DOA)
-Beginning of the current year?
- During the current year - Mid year acquisition ?
- In the prior year. How many years?
3. Fair value adjustments of NCA?
4. Intra-group sales/purchases?
5. UP of unsold inventories?
6. UP of transfer of NCA & its depreciation adjustments?
7. Intra-group expenses / income?
8. Dividend & interest payable/ receivables?
9. . Impairment loss and Bargain Purchase?

CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OCI

Steps to Prepare CSOPL&OCI
B) PREPARE CSOPLOCI
First situation: (When DOA > or = 1 year)
1. Combine income and expense line by line
H + S +/- Adjustments for intra-group transactions
2. Arrive at Profit after tax
3. W1: Appropriate PAT for the year
• To NCI first
• To Equity holders of parent
4. W2: Where there is Other Comprehensive Income(OCI) - appropriate the Total Comprehensive
income
• To NCI first
• To Equity holders of parent

CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OCI

Steps to Prepare CSOPL&OCI
B) PREPARE CSOPLOCI
Second situation: When a subsidiary is acquired part way during the current year:
Mid- Year Acquisition(DOA < 1 year)
1. Combine income and expenses line by line
✓ H + (S x time apportionment in CY) +/-Adjustment for intra-group transactions
2. Arrive at Profit after tax
3. W1: Appropriate Profit After Tax/Profit for the year:
• To NCI first
• To Equity holders of the parent/holding
4. W2: Appropriate the Total Comprehensive Income[TCI) [Where there is other comprehensive income]:
• To NCI first
• To Equity holders of the parent/holding

CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OCI

Steps to Prepare CSOPL&OCI
C) PREPARE STATEMENT OF CHANGES IN EQUITY
(When DOA > or = 1 year)
1. W3: Find GROUP Retained Profit b/f
2. W4(a): Find NCI b/f
i. NCI in PSC b/f in S
ii. Fair Value of Net Assets in S b/f
iii. Retained profit of S b/f in prior year (add/less Prior year adjustments)
3. Appropriate Ordinary & Preference Dividends
4. Find Transfer to Reserves
✓ H+ (S X H% )

CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OCI

 THE END
PLEASE REFER WORKING NOTES FOR THE FORMAT
CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OCI