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Black purchased its ordinary shares 70 % in Bury
Group structure Black ==> 70 % Bury
Statement of profit of loss for the year ended 31 October 20X5
Black Bury
$’000 $’000
sales 245,000 95,000
cost of sales (140,000) (52,000)
————– ———–
Gross Profit 105,000 43,000
Distribution cost (12,000) (10,000)
Administrative cost (55,000) (13,000)
Dividend income from bury 7000 –
————– ———–
Profit before tax 45,000 20,000Statement of Financial Position as at 31 October 20X5
Current Liabilities
Payable 9,000 2,460
Dividend 20,000 10,000Answer :
Black Group Statement Of Financial Position as at 31 October 20X5Current Liabilities
Dividend (20 + (10 x 30% ) ) 23,000My question is why when we consolidate on Dividend , we only recognized 30% on Bury Dividend . Is there any link between $7000 Dividend on Profit and Loss under Black to the consolidate SOFP .
I just want to know the reason and logic behind it.Regards
Dividends are not really so relevant for F3 – it is really only in F7 that they before important.
However, in the consolidated statements we only show dividends to outside the group (i.e. to the NCI). So the 7,000 goes out of the subsidiary and into the parent – so is ignored. It is only the dividend to the 30% NCI that is shown in the consolidated accounts.
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