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If a foreign subsidiary is acquired 2 years before the reporting date how the share of post acq’n retained earnings will be reflected in group ret earn and NCI ? the b/fwd amount of RE, post acq’n of this year will be converted using the previous year end rate and the share of this year profit converted at average rate ?
Only there will be FOREX gains nd losses on retranslation of g/w and NA for consolidation or this shall apply to RE of subsidiary too ?We know the extent of the foreign currency post acquisition profits. Convert. Take our share to W3
For Statement of Income, convert at average (except dividends which are at actual)
That gives you converted profits this year. Add through converted subsidiary results to parent’s results. Calculate nci’s interest in those profits and transfer to nci within the SOCIETY their share of this year’s subsidiary translated profits.
Does that answer it?
And what about the retained earnings b/f of this year for the subsidiary, which is post acq’n? at whch rate will it be converted to so thn it can be allocated to parent nd nci.
To get more into perspective can refer to the jun08 exam where the subsidiary zian is acquired 2 years before the reportin date. I am unable to understand this adjustment.
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