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Dear Mr. John,
Could I ask two questions, please?
In BPP revision kit 26.3,
1. what is the difference between <share capital> and <ordinary shares of $1 each>?
In the first line of the question, “Alpha purchased 90,000 <ordinary $1 shares> in Beta” I know that I use <share capital> to get NCI, but this line makes me confused2. In question 26.3, in calculating group retained earnings,
why we <90%> multiply post-acq. growth in Beta?Why <100%> of post-acq.growth in Beta is NOT included?
Even if Alpha has 90% of Beta, Alpha has control…1. Since they are $1 shares and the total share capital is $100,000, then it means there are 100,000 shares (of which Alpha bout 90,000).
2. Because Alpha owns 90% of Beta. The fact they have control does not mean they own all of the earnings!!!
You need to study the topic before attempting questions and I suggest you watch my free lectures. They are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well.
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