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sir while i was doing the open tuition mock exam..there are 2 questions of retained earnings of group consolidated sofp..to be find out…isnt it? group retained earning but the formula for it is..parent retained earning plus percentage of parent X(PAP)..BUT in both of the questions we cant find post acquired profit instead..we are subtracting subsidiary retained earnings at acquisition – retained earning at reporting date ..i am confused
The post-acquisition profits are always the current retained earnings less the retained earnings at the date of acquisition. The only reason that retained earnings will have increased is because of the profits made since the date of acquisition.
I do explain this in detail in my free lectures.
which lecture has it? let me re-watch it again..i think i forgot or didnt focus
but sir PAP is actually found out when u add stuff from the acquisition such share capital retained earning fv of land…and then at reporting date.. all these added and then the total is subtracted..isn’t it?
The current retained earnings are the total earnings since the company was formed.
The retained earnings at the date of acquisition are the pre-acquisition earnings.
The current retained earnings less the pre-acquisition retained earnings are the post-acquisition earnings (the earnings since acquisition).
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