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Suppose we have profit for the year given in the p or l and a retained earnings given in the sofp for a susbdiary, when calculating cons ret earnings, do we ignore the retained earning figure of the subsidiary given in the sofp and instead consolidate our own share of the profit given in the income statement with the parents ret earnings from the sofp?
That’s what a BPP kit did and I’m not sure if this is right.. It’s the parents retained earnings on the parents sofp plus our share of the retained earnings appearing on the sofp of the subsidiary, not the profit figure appearing on the income statement. Am I wrong?
Yes, you’re wrong, sorry
The mantra is:
H’s own +
H’s share of S post acq retained –
Goodwill impaired since acquisition (just our share)
So, where S was acquired part way through the current year, the relevant earnings to consolidate will be H’s share of S time-apportioned post-acquisition retained earnings for this year
OK?
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