Multinational Top-up Tax and Domestic Top-up Tax

MTT09530 - Miscellaneous pages: Accounting terms: Meaning of 'line by line basis'

When preparing consolidated financial statements, an entity might in some cases present discontinued operations separately from continuing operations.

Where this is the case, the discontinued operations are nonetheless considered to have been consolidated on a line-by-line basis for MTT purposes, even where the discontinued operations are presented as a single line item in the consolidated income statement.

Example

The ultimate parent of a group has a wholly-owned subsidiary, Ex Ltd. Ex Ltd’s operations are all discontinued. The ultimate parent disposes of Ex Ltd to a third party in the 2040 period.

In accordance with the relevant GAAP, the UPE chooses to present the results of the discontinued operations of Ex Ltd as a single item in the consolidated income statement, with an analysis in the notes to the financial statements.

The provisions on restructuring in section 208 (see MTT44010) will apply to Ex Ltd in relation to the disposing group, because Ex Ltd is considered to have been consolidated on a line-by-line basis.