Dividend receive from subsidiary from pre-acquisition reserves

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August 7, 2017 at 1:12 pm #400924
shamail1
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Hi..

if subsidiary pay dividend from pre-acquisition reserves then what be the accounting treatment in consolidated financial statement?
August 10, 2017 at 4:10 pm #401361
P2-D2
Keymaster
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Hi,

Any dividend received before the company becomes a subsidiary is treated as a normal dividend. Once the subsidiary is acquired then any subsequent dividends are eliminated from the group accounts.

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