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Greetings
I was just doing the practise questions in your website for consolidation statements part 2
There was something saying that the company took over another during the incopration
Therefore the markscheme says that there was no retained earningsI don’t exactly understand this term named incopartion..does it mean the company was newly formed so it has no retained earnings
Incorporation of a company means the formation of the company.
So the date of incorporation is the date the company was first formed, and therefore there were not retained earnings at that date.
I do explain this in my free lectures on consolidations. The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
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