foreign subsidary

I assume you have been doing the questions from the BPP kit. What BPP does is that they use closing rates on everything except the equity. On which they use the rate on acquisition date.

The method that Mike uses is NOT incorrect. It is an allowed alternative. It confused me as well when I looked up the answers. So, fear not, as the method that Mike uses has not prevented the previous students from passing the exam as it wont prevent us.

Thanks Hammad 🙂

Shreya, in any situation where there are alternative treatments available, it’s going to be the case that answers will differ.

Answers should be the same where the difference is in the way in which one arrives at a calculated figure but if it’s a difference in something like foreign currency translations, then of course your answer will be different when compared with the answer that has been arrived at using a different methodology

Cash flow alternative presentations of, for example, dividends paid where they may be included within operating activities or within financing activities will clearly lead to different subtotals on the cash flow statement

Ok?

I hope so too Shreya

(RE and nci will not be the same because BPP translate RE at date of acquisition at the rate as at date of acquisition whereas my way translates all at closing rate and hence the two methods will not arrive at the same end figure)

But if you prefer one method over another, that’s not a problem

Good luck