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Hi Sir
When calculating the ‘Investment in Associate’ line for the CSoFP, if there’s a dividend awarded by the associate, do we perform the calculation as follows:
Cost of investment
Plus: % share of post-acquisition reserves
Less: Impairments
Less: PURP adjustments
Less: share of any dividends paid by associateThe two parts I am most concerned about is whether we deduct any PURPs from the investment in associate figure and whether we deduct the share of the parent’s share of any dividend paid by the associate?
Thank you,
Ali
Hi,
Yes, if there is a dividend paid by the associate then we deduct the parent’s share of that dividend from the investment in associate.
With regards to the PURP, then we will again adjust for the parent’s share but only if the parent sells to the associate. I’d not get too hung up on associate PURPs as they’re far too difficult and rarely appear in the exam.
Thanks
Thank you – sorry, I missed the option to be alerted to your response and hadn’t noticed you responded. Thank you very much.
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