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Why the post acquisition revaluation surplus of $600,000 at year end is not included in calculation of Subtrak’s retained earning? However, NCI calculation include their share of revaluation surplus?
(Please answer as soon as possible)Retained earnings Plastik Subtrak
$’000 $’000
Per question 6,300 3,500
Less pre-acquisition(1,500 + (2,000 × 3/12)) (2,000)
Goodwill impairment (500)
Unwinding of discount on deferred consideration (1,800
(a) × 10% × 9/12) (135)Depreciation on FVA (100)
PURP (600,000 × 25/125) (120)
Total 6,045 900
Share of Subtrak (900 × 80%) 720
6,765Non-controlling interest $’000
NCI at acquisition 4,500
Share of post-acquisition retained earnings (900 × 20%) 180
Share of property revaluation gain (600 × 20%) 120
NCI 4,800The revaluation reserve and retained earnings are separate items in the equity section of the parent’s balance sheet so you don’t include it in the retained earnings calculation.
However, for the NCI, it is different. The equity, retained earnings and revaluation reserve are all combined into one figure when displayed on the parent’s balance sheet.
Will you please summarize steps for calculation of group R.E and NCI that what should be included and what shouldn’t? When practicing, I always get wrong answer for these because of adjustments like mentioned in above questions.
It’s too much to summarise in one forum post really. I suggest re-reading the OpenTuition notes, watching the lectures and re-reading your study text if you have one, then practice more questions. This is quite a key area of the syllabus so you need to practice it lots.
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