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In dec 2012 the question has this adjustment
Viagem’s investment income is a dividend received from its investment in a 40% owned associate which it has held for several years. The underlying earnings for the associate for the year ended 30 September 2012 were $2 million.
Investment income 500
The answer says Investment in associateis 2000×40% = 800
My question is why don’t we subtract the dividend paid by Associate? Also aren’t we supposed to subtract the goodwill impairment in the calculation of goodwill impairment?
What goodwill impairment? I see no mention of any goodwill impairment
Have you watched the video lectures on accounting for associates?
Have you even read the course notes?
How clearly must I say that, on consolidation, the parent wants:
our share of
this year’s
associate
adjusted
time apportioned
profit after tax
and dividends paid by the associate are paid out of AFTER-TAX profits
So the figure for “Share of associate” is our share of the associate’s post-tax pre-dividend profits
OK?