DIVIDEND IN CONSOLIDATED CI

“1. Share capital and share premium of subsidiary always unchanged?” – yes, and always totally pre-acquisition

“2. Contingent liability of subsidiary should be accounted in Group, I don’t understand why? it doesn’t certain for obligation?” – I think that you’re probably referring to the contingent liability of the parent that the parent will have to pay out extra consideration if the liability crystallises as a result of, for example, the newly-acquired subsidiary hitting performance targets

Why include it? Because IFRS 3 says that we must! It’s exceptional in terms of being a contingency that is recognised (as distinct from being merely disclosed)

However, if you were referring to a contingent liability of the subsidiary, and why do we include it within group financial statements, again the answer lies in IFRS 3

The effect of including these contingent liabilities (always pre-acquisition) is to increase the value of goodwill on acquisition and that goodwill figure is then subjected to an annual impairment review

“3. For consolidated of CI , why just include dividend of parent and ignore % dividend of parent in sub?”

The statement of profit or loss / comprehensive income is a statement of results / performance for the GROUP. From a group point of view we are looking to report those matters that concern the group and its activities with the outside world

An intra-group transaction (like intra-group sales, intra-group management fees and dividends from subsidiaries and associates) are not activities that involve the outside world. If we’re not going to include the parent’s share of the subsidiary’s dividend as an income, then we should also exclude the parent’s share of the subsidiary’s dividend as an appropriation

Is that better?

You’re welcome