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Sir,
In reference to the above, why did we have to calculate the gain in the parent?
Also, why wasn’t the gain in the parent of $50,000 not accounted for anywhere in the statements? Shouldn’t it be included in the Cons R.E.?We only included the gain in the group of $27,500 but not the gain in the parent of $50,000
P.S. – I’m gonna need a few more Balvanie shots for this one !
I suppose strictly speaking we don’t need it for exam purposes. Just occasionally he has been known to ask “What was the gain in the parent’s own records?” but I can’t even remember when that was last asked (that doesn’t mean that it was beyond living memory – just that I can’t remember)
Ok?
Have a Balvenie anyway! In fact, have a double
Lol,
BUT, why in example 3 for Diana & Liga,(D&L) we calculated the gain in parent of $35,000 and included that in the Cons R.E. There was a loss in the group of (152,500). Lets say there was a gain, will that figure be included in Cons. R.E as well?
We couldn’t have got that figure without working out W3A Gain in Parent for D&L.
So ultimately, for complete disposal MUST we workout gain in parent?
AND for partial disposal can we ignore that working?
What’s best? Just include them all anyway? Any shortcuts to this?
Well, yes, we must. Why? Because now there is no subsidiary. The proceeds of sale received from the buyer that has taken the subsidiary off our hands is included within cash (or receivables)
The only profits that are retained are those of Diana and they include Diana’s gain on the sale of Liga
Ok?
Perfect. Your the KING Mike.
If D&L had a gain in the group, instead of a loss, do we include both figures of the gain in parent and gain in group when calculating Cons R.E.?
For e.g. – Gain was $35,000 and loss was (152,500). Let’s say gain was 152,500. Do we add both $35,000 and $152,500 in the Cons R.E.?
For consolidated retained earnings we use the gain in the parent
For consolidated statement of profit or loss we use the gain in the group
Ok noted. This is just for a full disposal right?
The gain in parent figure is not used anywhere for partial disposals right?
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