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Hi mike
I will try and not ask anymore questions for a while after this one!
Example 4 page 60
The share attributable to the NCi in the soci is their share x Profit after tax of the sub adjusted for any Pups attributed to the sub. Why didn’t we deduct the subs dividend before calculating this figure? (The div is not already on the soci of the sub), ie can we just use the working 3 post acq retained of the sub, in an exam question as the basis for working 4b, assuming of course the acq was not more than a year ago ?
Cheers
Hugh
Yes, we can use the subsidiary’s adjusted profit after tax to calculate the nci’s share of this year’s subsidiary profits
Why not the dividend? Well you said it yourself! The dividend for this year has not been deducted in arriving so, by giving the nci their share of pre-dividend profits, we are giving them their dividend entitlement.
If that’s not clear, try this.
If we give nci their share of dividend plus their share of retained profits after dividend, is that not the same as giving them their share of pre-dividend profts?
Ok?
I guessed it was something like that but couldn’t put it all together ! , cheers
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