- This topic has 2 replies, 3 voices, and was last updated 14 years ago by
.
- Posts
Hi,
Anyone who has studied with Kaplan will know that FTC do consolidation by 5 workings.Well working 2 NET ASSETS of a subsidary…….. sometimes there is PURP put in and sometimes not can anyone tell me how i know if to put it in or not??????Thanks
HI.
The PURP stands for parents unrealised profit or just unrealised profit?
If its Parents unrealised profit, then you will NOT INCLUDED in the net assets of subsidiary.
ONLY SUBSIDIARY’S NET ASSETS that take place AT THE DATE OF ACQUISTION will included in calculation of net assets of subsidiary.
The net assets includes:
Share Capital
Share Premium
Pre-revaluation reserve
Pre-retained earnings (this is where unrealised profit should be deducted when the transaction take place before acquisition)That’s what i thought. I dont know about the others.
ALL THE BEST=)unrealise profit occurs when there is an inter group sales.its treatment will depend on who the seller is.if it is the parent making the sales u adjust(subtract) the group retained earning(w5).if it is the subsidiary making the sales u adjust the net asset of the subsidiary(w2)as that is where the subsidiary has its account.i hope its helps.
- You must be logged in to reply to this topic.