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Hi ,Chris may i know why the Dargent Co retained earning need to record the outstanding load interest at 31Mar 2016 and unrecorded share of Amery retained earning?
Why the Latree Co retained earning need to record interest on envinronment provision ?
Hopefully u can explain to me ,thanks.Hi,
In equity accounting we record the share of the post-acquistion profits of the associate. These are then added to the cost of the investment to get the investment in associate in the non-current assets and the other side of the entry is to increase the retained earnings of the group as otherwise it wouldn’t balance.
The environmental provision is recorded at its present value and the discount needs to be unwound to get to its final value when the payment is due. To do this we increase the provision and increase the finance costs.
The question says that the interest on the loan notes has not been recorded and so we need to accrue for the three months where they have been in issue.
Thanks
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