CONSOLIDATED STATEMENT

FORMULAS

INTERCOMPANY TRANSACTIONS
1.) Consolidated net income
Year of sale (plant asset) - First year (Inventory)
Parent net income from own operation, exclusive of dividends received from subsidairy
Impairment loss
Unrealized profit in ending inventory
Net unrealized gain/loss on sale (depreciable asset)
Unrealized gain/loss on sale (non-depreciable assets)
Parent adjusted net income
Add: Subsidiary adjusted net income
Subsidiary reported net income
+/- Amortization
Impairment loss
Unrealized profit in ending inventory
Net unrealized gain/loss on sale (depreciable asset)
Unrealized gain/loss on sale (non-depreciable assets)
Consolidated net income
Second Year (plant asset) - Second year (inventory)
Parent net income from own operation
Impairment loss
Realized profit in begining inventory
Unrealized profit in ending inventory
Realized gain/loss on sale (annual depreciation)
Parent adjusted net income
Add: Subsidiary adjusted net income
Subsidiary reported net income
+/- Amortization
Realized profit in begining inventory

xxx
(xxx)
(xxx)
(xxx)
(xxx)
xxx
xxx
(xxx)
(xxx)
(xxx)
(xxx)
(xxx)

Upstream sales
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xxx

xxx
(xxx)
xxx
(xxx)
xxx
xxx
xxx
(xxx)
xxx

Downstream sales

Unrealized profit in ending inventory

Realized gain/loss on sale (annual depreciation - excess)
Consolidated net income

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xxx

xxx
xxx

2.) Income from subsidiary

Year of sale (plant asset) - First year (Inventory)
Subsidiary reported net income
+/- Amortization
Impairment loss
Unrealized profit in ending inventory
Net unrealized gain/loss on sale (depreciable asset)
Unrealized gain/loss on sale (non-depreciable assets)
Subsidiary adjusted net income
Multiply by: Controlling interest
Income from subsidiary

xxx
(xxx)
(xxx)
(xxx)
(xxx)
(xxx)
xxx
x%
xxx

Second Year (plant asset) - Second year (inventory

Subsidiary reported net income
+/- Amortization
Realized profit in begining inventory
Unrealized profit in ending inventory
Realized gain/loss on sale (annual depreciation)
Subsidiary adjusted net income
Multiply by: Controlling interest
Income from subsidiary

xxx
(xxx)
xxx
(xxx)
xxx
xxx
x%
xxx

Upstream sales only

Upstream sales only

3.) Consolidated net income attributable to parent

Year of sale (plant asset) - First year (Inventory)
Parent net income from own operation, exclusive of dividends received from subsidairy
Impairment loss
Unrealized profit in ending inventory
Net unrealized gain/loss on sale (depreciable asset)
Unrealized gain/loss on sale (non-depreciable assets)

xxx
(xxx)
(xxx)
(xxx)
(xxx)

Downstream sales

Parent adjusted net income

Add: Income from subsidiary
Consolidated net income attributable to parent
Second Year (plant asset) - Second year (inventory)
Parent net income from own operation
Impairment loss
Realized profit in begining inventory
Unrealized profit in ending inventory
Realized gain/loss on sale (annual depreciation)
Parent adjusted net income
Add: Income from subsidiary
Consolidated net income attributable to parent

xxx
xxx
xxx

xxx
(xxx)
xxx
(xxx)
xxx
xxx
xxx
xxx

Downstream sales

4.) NCI in the net income of Subsidairy

Year of sale (plant asset) - First year (Inventory)
Subsidiary reported net income
+/- Amortization
Impairment loss
Unrealized profit in ending inventory
Net unrealized gain/loss on sale (depreciable asset)
Unrealized gain/loss on sale (non-depreciable assets)
Subsidiary adjusted net income
Multiply by: Noncontrolling interest
Minority interest in net income

xxx
(xxx)
(xxx)
(xxx)
(xxx)
(xxx)
xxx
%
xxx

Upstream sales only

Second Year (plant asset) - Second year (inventory

Subsidiary reported net income
+/- Amortization
Realized profit in begining inventory
Unrealized profit in ending inventory
Realized gain/loss on sale (annual depreciation)
Subsidiary adjusted net income
Multiply by: Noncontrolling interest

xxx
(xxx)
xxx
(xxx)
xxx
xxx
%

Upstream sales only

Minority interest in net income

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5.) Consolidated Retained Earnings

Year of sale of plant assets
No adjustment in Retained earnings on intercompany sales of plant assets, they are adjustment in
consolidated net income in the year of sales.
Second year or More than one previous year passed:
Consolidated retained earnings formula if involves more the one previous year passed
Parent Reported Retained Earnings - beginning / January 1
Gain on acquisition - on the date of acquisition
Impairment loss - previous years (cumulative)
Unrealized profit in ending inventory - recent previous year
Net unrealized gain/loss on sale (depreciable asset) - before adjustment of current year
Unrealized gain/loss on sale (non-depreciable assets)
Parent Adjusted Retained Earnings - beginning / January 1
Add: Undistributed Subsidiary adjusted net income
Subsidiary Retained Earnings - beginning of current year
Less: Subsidiary Retained Earnings - date of acquisition
Undistributed Subsidiary unadjusted net income
Amortization ( cumulative amortization )
Impairment loss - previous years (cumulative)
Unrealized profit in ending inventory - recent previous year
Net unrealized (gain)/loss on sale (depreciable asset) - before adjustment of current year
Unrealized (gain)/loss on sale (non-depreciable assets)
Total
Less: NCI share in the income undistributed adjusted cumulative earnings
Consolidated Retained Earnings - beginning/January 1
Add: Consolidated net income attributable to parent- current year
Total
Less: Dividends declared - parent only current year
Consolidated Retained Earnings - ending

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xxx
(xxx)
xxx
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(xxx)

xxx
xxx
xxx
xxx
(xxx)
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(xxx)
xxx
xxx

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xxx

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xxx
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xxx

6.) Noncontrolling interest

Year of sale of plant assets
No adjustment in Retained earnings on intercompany sales of plant assets, they are adjustment in
consolidated net income in the year of sales.
Computation of Noncontrolling interest more then one previous year passed
Noncontrolling interest - at the date of acquisition ( initial )
Add: NCI share in the income undistributed adjusted cumulative earnings
Subsidiary Retained Earnings - beginning of current year
Less: Subsidiary Retained Earnings - date of acquisition
Undistributed Subsidiary unadjusted net income
Amortization ( cumulative amortization )
Impairment loss - previous years (cumulative)
Unrealized profit in ending inventory - recent previous year
Net unrealized (gain)/loss on sale (depreciable asset) - before adjustment of current year
Unrealized (gain)/loss on sale (non-depreciable assets)
Total
Multiply by: Noncontrolling interest %
Noncontrolling interest - January 1, current year
Add: NCI in net income of Subsidiary/Consolidated net income attributable to NCI
Total
Less: Dividends declared x Noncontrolling interest
Noncontrolling interest - December 31 current year

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xxx
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xxx
xxx
(xxx)
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xxx
xxx

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xxx

7.) Plant and equipment on consolidated - Old cost or Cost prior to intercompany sales
8.) Accumulated Depreciation
Accumulated Depreciation - amount prior to intercompany sales (original or old value) - January 1, current
Add: Depreciation for year - computed in original depreciation (OLD)
Total
9.) Total gain on sale of plant assets when asset sold intercompany is sold to outsider.

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xxx

Actual gain in selling it to outsider

Add: Remainining unrealized gain on sale of assets
Total gain
Note: Please observe the sign if it is unrealized loss, deduct.

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