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Hi mike
In the solution to example 5, page 169, when you compare the retained
earnings of the parent c/F to b/F 198750 – 160875 = 37875 this ends up equalling the parents share that ends up on the soci last line. (57875 – divs 17 – NCi 3 = 37875). Yet when you compare the NCi c/F to b/F 15250 – 14250 = 1,this does not equal the figure that ends up on the soci, ie 3 for this year. Is it possible you could explain the reason for this? Is it something to do with the dividends?How much is the dividend declared by the subsidiary? What is the nci percentage? When you multiply the subsidiary dividend by the nci percentage, do you arrive at 2,000? (I’m asking because I don’t have the question readily available!)
If the figure that you arrive at by the above multiplication is in fact 2,000, then, yes, the difference IS related to the dividend!
When arriving at the consolidated profits for the year we pay no attention to either the parent’s dividend or, crucially, the subsidiary dividend. So, at this stage, the nci share of this year’s profits from the consolidated statement of profit or loss includes their share of the subsidiary dividend.
But by the time we get to the statement of changes in equity (which will never be asked in an F7 consolidation question) the nci should be credited with their share of profits (3,000) and debited with their share of the subsidiary dividend (25% x 8,000)(?)
Ok?
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