Just wondering, what did you say last minute about the SPL dividends - ignore it? Why is it double accounting?
By SFP, we must remove to see the investment.
L
Laura·
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
L
Linda·
I am sure it is an error as the question said S acquired A on 1 June 20x3, which is exactly 7 months. Also, in respect to SFP, we deduct dividend received to reduce the investment in associate.
F
Farirayi Belinda·
How do you account for the amount in investment in associate,,,,, when the puchase price is less that bet assets acquired
V
Valluru·
excellent
T
Tugcem Kocadal·
Hi,
So, on the parent company's individual SFP, the investment is shown as $250000?
Lectures are great so far...
Just wondering, what did you say last minute about the SPL dividends - ignore it? Why is it double accounting?
By SFP, we must remove to see the investment.
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
So, on the parent company's individual SFP, the investment is shown as $250000?