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A company acquire 70% of B company. In the income statement there is an account — Dividend income from B(subsidiary) –7000$. And In Balance sheet ,dividend is shown 20000$ and 10000$. I want to understand that why they calculate dividend like as 20000+ 10000×30%=23000. I think it would be 70% of the subsidiary dividend plus whole amountof dividend of parent entity. like this 20000+10000×70%=27000
And second questions is that Non-current assets always shown in Balance sheet as Cost-Accumulated Depreciation? (surely,if non current assets have accumulated depreciation.) in revision kit book some examples of balance sheet are shown with cost and next to it accumulated depreciation.
Thanks for attentionFirst question:
You need to show the dividend going outside the group. The 20,000 will be going outside the group, but only 3,000 of the subsidiary’s will be going outside the group (to the NCI). The other 7,000 stays within the group (because it is going to the parent).
(In fact, you are not likely to have inter-group dividends in F3. It is not until F7 they they become important)Second question:
The net book value (carrying value) of the NCA’s must appear in the Statement of financial position (we stopped calling it Balance Sheet many years ago!). Also, the details of original cost and accumulated depreciation have to appear, but the details can appear either on the Statement itself, or as a note to the Statements. (Certainly, limited companies tend to show the detail just as a note.) In the exam it will be made clear what is required.
I also agree with you about the 7000 stays within the group. Therefore, it should be 27000$ in consolidated statements?is is true? but in example they show dividend 23000 in consolidated financial statement.If 3000$ dividend belongs to NCI how they can show 23000 in consolidated?
No it isn’t true. As I wrote before, in the consolidated statement we are only showing what is due to be paid outside the group – 20,000 to the shareholders of the parent, and 3,000 to the NCI.
The consolidated statements show amounts owed to the NCI anyway!
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