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Explain why it is important to apportion a subsidiary profit or lo if acquired part way through a financial year in retained earnings working.
Because we can only include the profit or loss of the subsidiary that has been achieved whilst under the control of the parent.
Thus any profit or loss that was achieved before the parent acquired the subsidiary was not achieved whilst under the control of the parent and should be accounted for as part of working W2 Goodwill calculation as Retained Earnings at Date of Acquisition
Is that ok?
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