- This topic has 0 replies, 1 voice, and was last updated 11 months ago by
kelmgrogan.
Viewing 1 post (of 1 total)
Viewing 1 post (of 1 total)
- You must be logged in to reply to this topic.
New! Lectures for ACCA AAA September 2022 Exams are now available >>
New! BPP Books for ACCA September 2022 Exams are now available, get your discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Consolidated statements
Hi Sir,
Thanks for your lectures on this, really helpful. I have just come up against something that I don’t understand, this question;
Really acquired 75% of the equity share capital of Hard on 1 January 2019 when Hard had retained losses of 112000
At Y/E
Retained Earnings of Really are 2,464,000, and Hard are 1,204,000.
The question is what is the total amount of retained earnings to be included in the consolidated statement.
I thought the answer would be 2,464,000 + ((1,204,000 + 112000) *0.75) because at the time of acquisition retained earnings were at a loss, so seeing as everything post acquisition should be the amount that brought the retained earnings to 0, plus everything above 0 as it currently stands.
My answer in my book says that you should deduct the 112000 but I really don’t understand why, can you help me?
Sorry if that’s a very basic question, I have spent a bit of time thinking about it now!
Thanks loads,
Kellie