CHANGES IN GROUP STRUCTURES

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June 25, 2017 at 1:38 pm #394032
hanningtonsserwadda
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Hello, Thanks always for the helping hand.
Now am going through changes in group structures.
My question is:
If a parent company acquires a 15% interest in another entity and it’s shown as a financial asset but on the reporting date the company acquires more shares to the extent that the entity now is a subsidiary. How can I arrive at the post acquisition profits if I only have the earnings of this entity in the statement of financial position.

Can it be zero due to the fact that the parent entity obtained control at the reporting date.
Thanks senior
June 27, 2017 at 8:55 pm #394221
P2-D2
Keymaster
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Hi,

Glad to be of assistance. Yes, if we only gain control at the reporting date then there are no post-acquisition profits. The post acquisition profits will only begin to arise once the subsidiary continues to trade in the next financial year.

Thanks
June 28, 2017 at 6:35 am #394240
hanningtonsserwadda
Participant
- Topics: 27
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Great, Thanks alot. I had got that right. Thanks.
Open tuition team.
June 28, 2017 at 1:14 pm #394267
P2-D2
Keymaster
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Well done, don’t doubt yourself. It sounds like you’ve a strong understanding of groups and just wanted something cleared up. Keep up the hard work.
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