02-17-2009, 06:50 PM
Tariq,
The services provided (billed at 50M) by A to JV cost it at 40M thus producing total gain of 10M.
In proportionate consolidation, you will include 45% of each of these three figures i.e. to the extent of interests of other venturers (paragraph 48 of IAS 31). This means you will eliminate your own 55% share of this gain and INCLUDE following figures (to the extent of this very transaction) in consolidation
Revenue (50*45%)= 22.5
Cost (40*45%) = 18
Profit (10*45%)= 4.5
The figures of joint venture (stand alone) will be taken on proportionate basis in the consolidation.
In other words, for conslidation, take figures of A (excluding this transaction and add the above figures to calculate 'A's revised figures to be taken in consolidation. Then add the figures of JV through proprotionate consolidation method and find the final results.
I hope you can recalculate the figures. However, if you need further help please let me know.
Regards,
KAMRAN.
The services provided (billed at 50M) by A to JV cost it at 40M thus producing total gain of 10M.
In proportionate consolidation, you will include 45% of each of these three figures i.e. to the extent of interests of other venturers (paragraph 48 of IAS 31). This means you will eliminate your own 55% share of this gain and INCLUDE following figures (to the extent of this very transaction) in consolidation
Revenue (50*45%)= 22.5
Cost (40*45%) = 18
Profit (10*45%)= 4.5
The figures of joint venture (stand alone) will be taken on proportionate basis in the consolidation.
In other words, for conslidation, take figures of A (excluding this transaction and add the above figures to calculate 'A's revised figures to be taken in consolidation. Then add the figures of JV through proprotionate consolidation method and find the final results.
I hope you can recalculate the figures. However, if you need further help please let me know.
Regards,
KAMRAN.
