# Group Accounts The Consolidated Statement of Financial Position (1b)

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1. says

Good Night Sir.
In question 4 where they asked for retained earnings isn’t the \$14400 supposed to be added to the \$48000 for Z? The most appropriate answer there is \$216,000 that is just A’s earning for \$168,000 and Z’s for \$48,000. Could you explain for me please?

Thanks
That’s in the Test question.

• says

The consolidated retained earnings are those of the parent (168,000) plus the parents share of the post-acquisition earnings of the subsidiary (100% x (48,000 – 14,400) = 33,600)

I do deal with this in the lecture, and I do suggest that you watch it again.

• says

Thank you very much!! I watched it again and realized it was a mistake on my part.

Thanks a lot!!!

2. says

Just an FYI… On the test the extract used for the questions, says : P acquired 100% of the share capital of Q… but the accounts refer to P & Z… Not a big issue but just wanted to point it out.

3. says

Mr Moffat thank you very much indeed for these lectures. They are very helpful and I already passed my f2 exam by a margin thanks to your lectures.

If I could make a suggestion, is it possible to add number of minutes next to subsection names, so we could plan our time on these lectures, i.e. how much time we would have to spend going through a particular sub section of a chapter.

Many, many thanks.

4. says

What if there is a retained loss instead of retained earnings on the date of acquisition?

5. says

Dear sir,

When you calculate goodwill, why is the share capital of S, retained earnings and extra fair value on NCA the net assets of S? Why is the NCA, CA and CL not considered?

Lastly, the calculation of retained earnings, why is the company P not entitled to the retained profits of \$6000 (pre-acquisition profits) when they acquired company S? \

Many thanks!

• says

The definition of net assets is non-current assets + current assets – current liabilities – non-current liabilities. The net assets are always equal to the total capital i.e. share capital plus reserves (in this case retained earnings).

Company P is entitled to their share of pre-acquisition profits – that was part of the reason for the amount that they paid for their shares. The net assets at the date of acquisition would be equal to the total capital at the date of acquisition – i.e. share capital plus retained earnings at the date of acquisition.

• says

There is a separate lecture on the income statement – this lecture is on the statement of financial position!!!