Hello sir, I would like to ask a question..
When Subs pay dividend amounting to $10k and Holding co holds 70% shares in Subs.
So the elimination of intra company div .. i understood. But why there is no impact to nci when subs pay dividend?
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Dividend paid to nci
I get confused because there are 2 method to find fv of nci at date of disposal under proportionate goodwill method.
First method is..
1. FV of NA @DOD x NCI%
And
second method is ...
FV of NCI @ DOA
Add : Sub’s post profit x nci %
If the question states the dividend paid is $10000... why we dont take S’s post profit minus dividend? Why only profit after tax?
5y ago#2If you are trying to calculate Pre or Post acq profits or Net assets - the rule is that dividends are on a cash not accruals basis (are they paid before or after whatever date you are looking at?)
I would advise you not to worry too much as, apart from cash flows, there has been no mention of dividends in this exam for many years. The examiner is more interested in testing us on much more disgusting things!
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