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Hello
Just want to ask how to account for dividend received from subsidiary during the year
1 – Statement of financial position
2 – Statement of profit and loss and other comprehensive income.I have come across 2 scenarios.
SOFP:
In question in SOFP where dividend was received from sub and credited to OCI – In answer we Dr OCE and CR RE to correct the error
SOPLOCI:
In a different question, subsidiary(90%) announced a dividend of 50 m which was added to parent’s other income. In answer 45 (50×90%) was removed from other income and answer states ‘ Not included in consolidated statement of profit and loss and other comprehensive income’
I am just confsued. If we do not include it in consolidated statement of profit and loss and other comprehensive income then we should have removed it from SOFP as well.
Please help.
Thanks
Hi,
Any dividends received should be credited to profit or loss as part of investment income, therefore in your SFP query they should not have been credited to OCI but RE instead, hence the adjustment.
In the group SPLOCI we cannot record income from the subsidiary, hence it is removed on consolidation, thereby we have removed our share of the dividend at 90% of the 50 million.
Thanks
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