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1.How to account for dividend from subsidiary and associate to parent in consolidation?
2. expense incurred by parent on acquisition in acquiring a subsidiary
Dividends from subsidiary and from associate are accounted for on an accruals basis in the individual financial statements of the parent but are IGNORED in the consolidation accounts ie they do NOT feature as income in the consolidation
The expenses (such as legal and accountancy fees) incurred by the parent on acquisition of a subsidiary are expensed in the parent’s individual Statement of Income. This means that they are NOT included as part of the cost of acquisition in the computation of goodwill
OK?
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