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ASSOCIATE = SELLER then dr parent share of profit in associate (P/l) dr retained earnings (SOFP) cr group inventory (SOFP) PARENT = SELLER then dr cost of sales (P/l) dr retained earning (SOFP) cr investment in associate (SOFP) please explain these entries i cannt get any concept from this sir and i hear your lecture to but this still confuse me please help me sir i shall be thanhkful to u
You’ve confused me so it’s no surprise that you’ve confused yourself too!
Calculate the total pup and reduce the associate’s retained earnings by that full amount as you calculate the consolidated retained earnings in working W3.
That sorts out automatically the elimination of the parent’s / group’s share of the pup.
In working W5A Investment in Associate, cost + share of (adjusted for pups) associate post acquisition retained earnings – any impairment in the value of the associate will sort out the group’s interest in the associate for the consolidated statement of financial position
Try that!
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