Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Retained earnings brought forward
- This topic has 5 replies, 3 voices, and was last updated 8 years ago by MikeLittle.
- AuthorPosts
- September 21, 2016 at 5:28 am #341098
Are retained earnings b/f always adjust by removing pre acq figure?
Reference is example 5 of chapter 10.i dont understand why the figure of retained earninng b/f has been this adjusted.
Many thanks
September 21, 2016 at 7:24 am #341127If the acquisition was earlier than last year, then yes
For example, we’re consolidating to 31 December 2015 and we acquired in 2009
The retained earnings brought forward as at 1 January 2015 will be calculated by deducting the pre-acquisition retained earnings from the overall subsidiary retained earnings brought forward
Ok?
September 22, 2016 at 7:48 am #341311Thank you!
September 22, 2016 at 9:00 am #341348Hello Mike,
I will want you to explain this better. Why are we deducting per_acquisition retain earning after 7yrs of acquisition according to your example.
September 22, 2016 at 9:06 am #341352@mikelittle said:
If the acquisition was earlier than last year, then yesFor example, we’re consolidating to 31 December 2015 and we acquired in 2009
The retained earnings brought forward as at 1 January 2015 will be calculated by deducting the pre-acquisition retained earnings from the overall subsidiary retained earnings brought forward
Ok?</blockquoteHello Mike,
I will want you to explain this better. Why are we deducting per_acquisition retain earning after 7yrs of acquisition according to your e
September 22, 2016 at 1:42 pm #341385Because they are pre-acquisition!
And they always will be until we sell that subsidiary
And if we bought that subsidiary 50 years ago, we would still deduct the pre-acquisition profits that had been accumulated as at date of acquisition 50 years previously
- AuthorPosts
- You must be logged in to reply to this topic.