[coolfellow]

thank you so much for your help I also had the same concept in mind that you told but I will cross check to find the mistake.

[coolfellow]

thank you may be some information is miscommunicated that’s creating all this fuss.

[coolfellow]

I am doing a question in which parent company own 100% shares and the retained earning of subsidiary at the time of acquisition is 50000 and the post-acquisition retained earning is 20000. Now in the solution it’s solves as :

$100000 (retained earning of parent)+ (50000-20000) = $130000
good will that rose in this situation is $30000.

I am confused that why this subtraction is done. Please help me

[coolfellow]

Dear tutor please tell me that while calculating the consolidated retained earning why we subtract the pre acquisition and post acquisition retained earnings? why don’t we take the direct account of the post acquisition retained earning of the subsidiary?

[Author]

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