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Sir,
While taking in account mid year acquisitions, does it refer to only the acquisition made when the financial statements are prepared?
For example;
Financial Statements are prepared on 31st December 2013
X Ltd(subsidiary) was acquired on 1st Feb 2008
Yltd (associate) was acquired on 31st July 2013Will Xltds’ calculation be based on mid year acquisitions?
Secondly for reserves of a subsidiary do we always calculate only the parent’s share of post acqn movement in them if any, or do we take the share of full amount as at books?
Thirdly, when it comes to dividends
An associate made profit of 20, 000 and paid 1000dividends
What effect does this have?Thank you for your help and support
No, because after the year of acquisition, from that point on the parent controls the subsidiary
Number 2, the post-acquisition profits of the subsidiary are calculated in working W3 (in my standard workings). The parent’s share is added to the parent’s own retained earnings and the nci share falls down into working 4A to add to the nci value at date of acquisition
Number 3, what do you mean “What effect does this have?” The associate’s retained earnings figure decreases by $1,000 so working W5A is affected. The CSofPorL ignores the dividend received from the associate. What else do you want to know?
Ok?
So just to clarify mid year acquisitions are only taken into account if it occurs in the year financial statements are prepared?
Everything else I understood.
Thank you!
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