Associates (IAS 28) – Introduction – ACCA Financial Reporting (FR)

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1. LBT21 says

   November 19, 2023 at 4:14 pm

   Hi,

   Please could someone clarify the notes that sit alongside this lecture?
   Exam preparation question – Investment in associate
   On 1 June 20X3, S acquired 25,000 equity shares in A for $300,000. At the date of acquisition, A had in issue
   100,000 $1 equity shares. A generated profits for the year of $235,000 and paid a dividend of $40,000.
   Calculate the carrying amount of the investment in associate to appear in the group statement of
   financial position as at 31 December 20X3, assuming the profits accrue evenly during the year.

   The answer gives 6 months but I’m sure it’s 7 months?

   Also, confused regarding the dividends as in the above answer and example 2, it’s telling us we need to deduct the dividend?!

   Thank you

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   • LindaC says

     February 19, 2024 at 8:23 am

     I am sure it is an error as the question said S acquired A on 1 June 20×3, which is exactly 7 months. Also, in respect to SFP, we deduct dividend received to reduce the investment in associate.

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2. farirayib says

   September 10, 2021 at 9:23 am

   How do you account for the amount in investment in associate,,,,, when the puchase price is less that bet assets acquired

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3. vklsts says

   August 31, 2021 at 4:03 am

   excellent

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4. tugcem says

   June 17, 2020 at 7:50 pm

   Hi,
   So, on the parent company’s individual SFP, the investment is shown as $250000?

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