Ch310 Course notes: example 5. Proofing CRE w3 for CSoI.Statement

In Didzis and Ansis the dividend for the year is shown as deducted within the statement of profit or loss so there’s no further adjustment to make (incidentally, it is incorrect to show dividend appropriations within the statement of profit or loss, but that’s what the two financial accountants have done in the cases of Didzis and Ansis!)

So, NO adjustment necessary for the two dividends when starting with retained earnings carried forward of 212 and 41 respectively

OK?

Post acquisition profits in Ansis are therefore $23,000 ($41,000 – $18,000) at date of acquisition and our share is 75% = $17,250

$3,000 for the nci is their share of this year’s subsidiary profit after tax ie 25% * $12,000 and the nci is valued on a proportional basis per the question so they suffer none of the goodwill impairment

If the consolidated profit after tax is $57,857 and $3,000 of that relates to the nci, then the balance of $54,875 must be the parent’s share

I’m not sure what you refer to in your question “I am confused which Div value to take?” By giving the nci their $3,000, that amount INCLUDES their share of the Ansis dividend because it is out of the $12,000 profit after tax that the Ansis dividend is going to be paid

OK?

a/ based on our g/w imp figure $27375. Why did we not treated is as proportion in W3?

Is it because the nci was originally valued on a proportionate basis?

b/ continued from a/ in W3(a b/f) after $188250 why we just deducted $27375 imp amount? Should we not fraction it with 75% ( $27375 * 75%) as we are 75% owners? Even the question says that D’s policy is to imp on 100%, in this case our figure should have been $36500(from W2)…?

Is it because there was historically a goodwill impairment and the question is now asking us to impair the rest? And it’s only THIS YEAR’S impairment that will go into the statement of profit or loss?

c/ continued from b/ ok now this is our policy to imp 100%, but why in W3( b c/f ) we deducted imp of 36500?

Because working W3 is cumulative “H’s own + …… less goodwill impaired SINCE ACQUISITION”

d/ Now in W4 and W4a we didn’t even take any impairment amount to deduct. Why it is not taken and deducted?

Again, is it because nci was valued on a proportionate basis. They weren’t credited with any goodwill on acquisition so it’s a bit unfair (?) to deduct a share of the goodwill impairment

I’ve answered all that from memory (that’s why my responses start with “Isn’ it because ….”)

Does that clear it up for you? If not, please post again

We have done that on proportional basis, right, But I didn’t understand the logic why we are missing g/w imp here. Why specifically we dont deduct that or take g/w imp?

Because on a proportional basis, the nci have no goodwill attributed to them

a/ Now I have prepared the CSoIS and it is right till p/f after tax $57875 and I know $3000 relates to NCI here. But I am asking that you taught in prev exmples that after p/f aftr tax we deduct Div value and nci value to proof our figure of W3. It looks like this to make it simple ( $57875 – Div – nci = Proof figure similar to W3)

Agreed

a continued/ Now giving you example so you can more understand what I am after: Lets take ex4 of this chapter. Extract from my CSOIS of this ex4: ( $77300 – Div( 30,000) – NCI( 15720) = Proof ( $31580, it is same to W3 figure ie $31580). DONE, THATS ALL THIS!!

When you say “DONE, THATS ALL THIS” I thought that you were happy. If you’re not, please rephrase your post to tell me WHERE you’re not happy