Post-acquisition profits
Post-acquisition profits are profits accumulated by a subsidiary after the parent obtains control, subject to consolidation adjustments. The parent’s share contributes to group retained earnings and the non-controlling share to non-controlling interests. For example, a 30 increase allocated 80% to the parent and 20% to non-controlling interests gives shares of 24 and 6 before consolidation adjustments.
Worked example
A subsidiary’s retained earnings rise from 40 at acquisition to 70 at year end, giving 30 before consolidation adjustments.
Common mistake
Including profits earned before control was obtained as group post-acquisition profits.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | FR | Direct | Official assessment-window verification pending |
| ACCA | FR | Direct | September 2026–June 2027 |
| ACCA | K1 | Direct | July 2027–August 2028 |
| ACCA | SBR | Direct | September 2026–June 2027 |
| CIMA | F2 | Direct | Official assessment-window verification pending |
| FIA | FFA | Direct | September 2026–June 2027 |