Accounting On Demand 1 --- Key adjustments required in preparing consolidated income statement

1. Intra-group trading is to be removed from group accounts by reducing the amount from sales revenues & cost of sales amount.

2. Any unrealised profits on inventories thus acquired and was held at year-end are to be deducted from consolidated gross profits figures.

3. Inventory values are to be reduced by the amount of any unrealised profits arising from intra-group trading.

4. The minority interest in the subsidiary company’s results for the year-end is to be determined.

5. The intra-group dividends are to be account for. ONLY Parents’ dividends are taken into consideration in preparing group accounts.

6. Pre-acquisition profits are to be removed.

7. Amortisation of goodwill is to be calculated separately also when preparing group accounts. It will not be given directly.