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In the answer of a part
The retained earnings calculated for the group includes the associates’ profit but we don’t include the associate profit in group retained earnings instead it is included in investment in Associate which we include in balance sheet
Won’t this mean that we are double counting it?
Please explain me this.
ThanksIn the top of the balance sheet we add the post acquisition profits of the associate to the cost of the associateI
In the bottom of the balance sheet we reflect the post acquisition profits of the associate in retained earnings
If we don’t put the post acquisition profits in the top and bottom of the balance sheet the balance sheet will not balance
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