ACCA FR · Chapter 13 · Question 7 of 11
An associate made profit after tax of $900,000 for the year, all after acquisition. The investor holds 30%. Impairment of the investment in the year was $50,000. What figure should appear as 'share of profit of associate' in the consolidated statement of profit or loss?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) $220,000
Explanation
Share of profit = 30% x $900,000 = $270,000. Impairment of the investment in associate for the year is deducted: $270,000 - $50,000 = $220,000. The associate's revenue and expenses are not added line by line, because only one figure is shown.
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