For transactions involving intragroup services, it is assumed that the profit is realised by the group immediately on payment within the group. Therefore, no NCI adjustments are made on consolidation in relation to such transactions.

Question

Quizplus · Accepted Answer

This is because intragroup services are assumed to generate no profit when provided within the group, as the group as a whole benefits from the service. Therefore, any payments made for intragroup services are simply transfers from one group entity to another, and are not recognized as generating a profit for consolidation purposes.

For Transactions Involving Intragroup Services, It Is Assumed That the Profit