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HI Mike,
the solution to answer of polestar Q1 dec 2013 has post acq losses of 2300 added back to FV of NCI@DOA workings which contradicts to similar workings in the Paradigm J13 Question where you reduce the retained ear losses of 2000 from the FVofS’s NA @DOA workings.
what i am confused is , should losses be reduced or added back for goodwill workings and retianed earning workings .
thanksThe question kindly tells you what the retained earnings figure was at date of acquisition in the POlestar question
BPP have chosen to show $14.3 million as $12 million brought forward and an add-back of $2.3 million losses for the post-acquisition period
You’re right, I too find it confusing!
The question specifically states that retained earnings as at date of acquisition were $14.3 million so why we have to go through this tango of adding pack post-acquisition losses I really do not know
However, if retained earnings were $14.3 million (as we must assume to be correct because that what the examiner has said) then surely the retained earnings brought forward must have been $16.6 million
Then we have half a year where $4.6 million was lost so $2.3 million was lost in the pre-acquisition period and that leaves us with $14.3 million as at date of acquisition
Does that make it easier?
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