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The alternative approach (and one that I always adopt) is to take the subsidiary retained earnings brought forward and then add on the retained earnings for the pre-acquisition period (in this case I’m guessing that it’s 3 months) but you should nevertheless arrive at the same figures
I also prefer this method but where I am getting stuck is the treatment of retained earnings.
In all the questions I have done thus far they simply give you the pre acquisition retained earnings (before the parent acquired the sub) and after the acquisition. In that case I just x/12 the months that do not relate and deduct the whole figure from the consideration
In the example I am talking about the pre acquisition retained earnings isn’t given. Now trying to find the figure to take off the consideration to get the goodwill is baffling me. All they have given is the post acquisition financial statements.