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Hi sir,
I am wondering what should be transferred to Retained earnings from Other component equity except for Gain/Loss on sale of subsidiary and Post-acquisition profits the two parts?
When it comes to SOFP, we need to deduct the impairment to get the Post-acquisition profits, while when it comes to P/L&OCL, we do not need to deduct the impairment to get the Post-acquisition profits. Is it right?
Many thanks
Hi,
The most common item transferred to retained earnings from other components of equity is any gain still held on a revalued asset that is then disposed of. I’m not sure how the to items you refer to above are included in other components of equity. Gain/loss on disposal of a subsidiary appears in profit or loss and the post acquisition share of the profit appear in retained earnings.
In the SFP the impairment is deducted from the group retained earnings, it is not part of the post-acquistion profits. It is then included in the group SPLOCI, and adjustments are made if necessary in both financial statement to the NCI depending on the method used to measure goodwill.
Thanks
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