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- This topic has 11 replies, 3 voices, and was last updated 7 years ago by MikeLittle.
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- December 1, 2016 at 5:45 pm #352945
Dear MR Mike,
there are 2 issues for the associate :
First: at chapter 11, (at individual books, recognizing “dividend income” in the Statement of Profit or Loss and Other Comprehensive Income)”
But, at the consolidated statements, it is recognized only “the group’s share of the associate’s results” .
Is that Contradiction?, it is not understood ? as, the revenue at the parent individual books will be different from which at the consolidated statements.
the second issue :
The profit resulting from the ‘inter-entity’ transactions, we must eliminate only the group share of that profit regardless there is URP or not, is that right?Thanks
December 1, 2016 at 7:17 pm #352959Income from an associate’s dividends is not included in any entity’s revenue figure
No, we eliminate only the group share of the UNREALISED profits
December 1, 2016 at 10:07 pm #353008“we eliminate only the group share of the UNREALISED profits”
So,that elimination has an impact on the inventory ? in other meaning, should the inventory
(as an asset) be reduced by the eliminated part of URP amount ? that for the transaction with associate .
December 2, 2016 at 9:01 am #353102The consolidated retained earnings decrease (working W3) and the Investment in Associate decreases (working W5A)
December 3, 2016 at 12:10 am #353288Thank you
My greetings to you .December 3, 2016 at 7:51 am #353308You’re welcome
January 4, 2017 at 1:39 pm #365021Dear sir,
If an associate company has impaired goodwill, how will it affect the calculation of retained earnings?
Will it be deducted from the retained earnings of the associate company and then the group receives its share?January 4, 2017 at 2:04 pm #365043No
The premium paid on acquisition ( it’s not called ‘goodwill’) belongs entirely to the investor (the parent) so when we calculate working W3, consolidated retained earnings, we need to take our share of the associate’s post acquisition retained and then deduct the impaired goodwill at the end of that working
In working W5A, investment in associate, the calculation is:
cost of investment plus
our share of associate’s post acquisition retained less
goodwill impaired since acquisition … but we don’t call it goodwill!
OK?
January 4, 2017 at 2:21 pm #365045Yes, but this is for the investment in acquisition which is shown in assets of consolidated statement of financial position.
What about the calculation of consolidated retained earnings assuming that a question mentions that the associate company has impaired goodwill?
January 4, 2017 at 3:49 pm #365066Did you read the last post from me?
Here’s the relevant part again
“The premium paid on acquisition ( it’s not called ‘goodwill’) belongs entirely to the investor (the parent) so when we calculate working W3, consolidated retained earnings, we need to take our share of the associate’s post acquisition retained and then deduct the impaired goodwill at the end of that working”
January 4, 2017 at 4:05 pm #365068Understood sir. Thank you 🙂
January 5, 2017 at 8:38 am #365157You’re welcome
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