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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Dividends from associate
hi does dividend received from associate affect group retained earnings?
When the dividend is received by the parent company then it will record it as investment income and then this will impact the retained earning of the parent via the profit for the year. This retained earnings figure is then included 100% in the group retained earnings figure on consolidation but there is no adjustment to be made for the dividend received in the group retained earning.
The only adjustment required is to remove the dividend received from the SPL when equity accounting and then reduce the share of profit of associate on the SFP.
Thanks