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Dear sir,
Could you explain the circumstances where I’d be required to time apportion retained earnings, as I’m struggling with this area?If I’m right for the CSFP you’d only need to do it for a mid yr acquisition.
What if just the acquisition and reporting date are given? Do we need to time apportion if no other details are given?This question is in reference to the Dec 2008 question Pedantic.
I’d be grateful if you could answer this question
Thanks!
“What if just the acquisition and reporting date are given? ”
I don’t understand this! The acquisition date and the reporting date are always given!
Do you possibly mean “The retained earnings as at acquisition date and reporting date are the only information given”
If we had 3 years ago a mid-year acquisition on 31 May, 2014 and the reporting date is 31 December, 2017, the question must tell you what the retained earnings were as at date of acquisition
And we know the (adjusted as necessary) retained earnings as at reporting date.
Take one from the other and there’s the post-acquisition retained earnings
Does that answer it for you?
Dear sir,
So we just subtract closing and opening Retained Earnings which is the profit?“Take one from the other and there’s the post-acquisition retained earnings.”
What exactly does this mean?
If we know the (adjusted as necessary) closing retained earnings and we’re given the retained earnings at date of acquisition, and you deduct those date-of-acquisition earnings from the closing (adjusted as necessary) retained earnings, what have you got?
You’ve arrived at the figure for post-acquisition retained earnings!
That’s exactly what it means
OK?
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