Study RoomHi all, how's everyone finding the AI. Quick one on the group statements in the CS AI, the parent acquired a sub part way through the year so the consolidated P&L only has seven months of the sub's revenue and costs but the prior year comp is nil. When we're doing Q1 style commentary on revenue growth and margins, are you all stripping out the acquired sub's contribution from the current year so the growth is on a like for like basis, or leaving it in and just explaining the step up from the acquisition. My tutor said the examiner wants the underlying movement but I'm not sure if that means I should adjust the comp aswell, or just adjust current year. Any thoughts appreciated.
Mid year acquisition and trend analysis in the AI
Asked by Grace W. · 22d ago
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1 answer
Quick one, I'd strip the acquired sub out of the current year rather than trying to adjust the prior year comp. The prior year figure is nil because the group didn't own it, so adding a notional prior year contribution would be making up data unless the AI gives you that separately. For underlying movement the examiner usually wants like for like, so compare prior year as reported to current year excluding the sub's seven months of revenue and costs. That gives the organic growth and margin movement. Then you can still mention the acquisition separately as the step up, but don't leave it in the main trend calc. Cheers
Priya K. · 21d ago
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