Hello Sir,
I want to ask you a question.
Usually when we do working 5 to calculate the group retained earnings, we take the parents share of subsidiary post acq profits, as was in the lecture, example 2 basic consolidation of chapter 4.
However, when I started doing example 3 by myself, I noticed that they took the parents share of the subsidiary post acq retained earnings and not the profit.
Can you please explain why this is? I get confused a lot of times since sometimes the post acq profits are taken and sometimes the post acq retained earnings are taken.
Thank you.
Ask the Tutor ACCA SBR
consolidation
9y ago#1Hi,
It is essentially the same thing. just slightly different terminology. Don't forget that the profit made each year is accumulated through retained earnings, so we are taking our share of the profits since acquisition which are included within retained earnings.
Hope this clears up any confusion.
Thanks
Sign into reply to this topic.