June 2015 question 1 post acq. profits

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May 28, 2018 at 11:19 am #454376
Candy
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Dear tutor,

Can you please explain why we did not time apportion House post acq. profits in GRE(w5) even though it was acq. part way through the previous year?

Many thanks in advance
May 28, 2018 at 8:55 pm #454493
P2-D2
Keymaster
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Hi,

We are given the retained earnings at the acquisition date, and so there would be no need to pro-rate the post-acquisition profits as they all relate to the post-acquisition period.

Thanks
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