- This topic has 3 replies, 2 voices, and was last updated 7 years ago by
.
Viewing 4 posts - 1 through 4 (of 4 total)
- Posts
Let’s suppose that Parent owns Subsidiary 90% shares. Then, why the retained earnings of S at the date of acquisition should be deducted when calculating the Group retained earnings at the balance sheet date ?
Because we should only include their share of the earnings since they acquired the company.
The earnings before the date of acquisition form part of the value of the subsidiary at the date of acquisition and were therefore part of what the parent was paying for, and therefore are taken into account in the calculation of the goodwill.
I do suggest that you watch my free lectures on this. The lectures are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well.
Viewing 4 posts - 1 through 4 (of 4 total)
- You must be logged in to reply to this topic.