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In dec 2012 the question has this adjustment
Viagem’s investment income is a dividend received from its investment in a 40% owned associate which it has held for several years. The underlying earnings for the associate for the year ended 30 September 2012 were $2 million.
Investment income 500The answer says Investment in associateis 2000×40% = 800
My question is why don’t we subtract the dividend paid by Associate? Also aren’t we supposed to subtract the goodwill impairment in the calculation of goodwill impairment?What goodwill impairment? I see no mention of any goodwill impairment
Have you watched the video lectures on accounting for associates?
Have you even read the course notes?
How clearly must I say that, on consolidation, the parent wants:
our share of
this year’s
associate
adjusted
time apportioned
profit after taxand dividends paid by the associate are paid out of AFTER-TAX profits
So the figure for “Share of associate” is our share of the associate’s post-tax pre-dividend profits
OK?
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