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Dividends on consolidation

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Dividends on consolidation

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by Stephen Widberg.
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  • Author
    Posts
  • September 2, 2020 at 12:37 pm #583115
    mihaifrunza
    Member
    • Topics: 1
    • Replies: 1
    • ☆

    Hello there,
    Strictly for SOFP, when you consolidate in Retained earnings profits from subsidiary do you consolidate it with including or excluding dividends (50 net profit, 30 after dividends).

    Parent (after receiving dividend of 20)

    Cash +20
    Retained earnings +20
    So i need to add an additional 30 to include the entire profit of 50 made by subsidiary

    Subsidiary (prior to payment of dividend

    Assets 100
    Liabilities 50
    Retained earnings 50

    Subsidiary (post payment)
    Assets 80
    Liabilities 50
    Retained earnings 30

    September 2, 2020 at 1:05 pm #583116
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3411
    • ☆☆☆☆☆

    After dividends.

    Please remember that you will not be asked to do a consolidation in this exam. You will be asked to explain certain adjustments such as goodwill and exchange differences. So do not spend time trying to reconcile balance sheets – they were examined in financial reporting but not this exam.

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