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dividend

Forums › ACCA Forums › ACCA SBR Strategic Business Reporting Forums › dividend

  • This topic has 4 replies, 3 voices, and was last updated 14 years ago by nazihah.
Viewing 5 posts - 1 through 5 (of 5 total)
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    Posts
  • September 7, 2010 at 11:12 am #45205
    nazihah
    Member
    • Topics: 2
    • Replies: 3
    • ☆

    pls can anyone explain how to treat divident in consolidation..ques 33 BPP (Ejoy) and Ques 35 (base)

    thanks

    September 14, 2010 at 2:42 pm #67808
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23321
    • ☆☆☆☆☆

    If it’s a parent’s dividend, show it in Statement of Changes in Equity.

    If it’s a subsid dividend, need to deduct from subsid’s retained earnings ( may need to time apportion pre and post acq elements ) and show as an increase in parent’s retained earnings ( again, may need to treat the pre-acq element as a reduction of the cost of investment and only take the post-acq element to parent’s retained earnings

    September 16, 2010 at 12:20 pm #67809
    studybuddy
    Member
    • Topics: 2
    • Replies: 4
    • ☆

    Subsid dividend
    Please explain the concept of deducting the pre-acq element as a reduction of the cost of investment, and why the dividents are deducted from the Subsid’s retained earnings.

    Thank you

    September 18, 2010 at 6:05 pm #67811
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23321
    • ☆☆☆☆☆

    Why they are deducted from Subsidiary’s retained earnings? Because they are earnings which are not being retained – they are being paid out as dividends!

    The concept of pre-acquisition element being deducted from cost of investment? Because goodwill is measured as the difference between fair value of consideration paid less the acquired share of the fair valued net assets at date of acquisition. Now, if some of those fair valued net assets as at date of acquisition are subsequently paid out as a dividend, surely that element should be deducted from the cost of the investment – ie we have effectively paid a reduced amount for a our share of a reduced value of fair valued assets as at date of acquisition ( reduced, because some of those assets have now been distributed )

    September 19, 2010 at 8:06 am #67812
    nazihah
    Member
    • Topics: 2
    • Replies: 3
    • ☆

    thanks werty for the explanation on divident. i t surely help…

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