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hi john please help with this.
as we deduct the effect of dividend from p/l. i’m having so much trouble when to do apportionment for dividend for ex (40,000*30%) like this and in some questions we are deducting the whole 40,000 please help when do we apportion the dividend and when not.
thanks alot.
Hi,
it depends on what the question is telling you as to how you make the adjustment.
If we see a dividend in the SPL of the parent of 40,000 and there is only one subsidiary/associate then all of this dividend income must come from that subsidiary and hence it is all eliminated on consolidation.
We take our share of the dividend and deduct that from investment income when we are told the full amount of the dividend paid by the subsidiary/associate. In this instance we will only have recorded our share of the 40,000 and so eliminate the 30%.
Hope that clears it up for you.
Thanks
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