Penketh 6/2014

No, they're not! It used to be the case a few years ago that, where we have a mid year acquisition and the acquiree pays a dividend, we had to time apportion that dividend and say that some came from pre-acquisition profits and some from post-acquisition profits That has now changed and a dividend is deemed to be paid out of the profits of the period during which it is paid Having said that, there was an F7 questions >15 years ago where the company had recently been making losses but nevertheless paid a dividend out of retained earnings brought forward In that situation there was no doubt that that dividend had been paid out of pre-acquisition profits! Otherwise, no time apportionment OK?

Yes,After I posted the question, I realised that I could check ACCA's answer. Now I realise that this was a silly question. One more question, Investment income is 5000 in parents accounts,so it is always the dividends in the individual accounts which are received from the associate (Are there no profits from the associate included)?

In the investor's own financial statements, only dividend income is recorded in the statement of profit or loss and only the cost of the investment is shown in the statement of financial position But of course things change dramatically when we start the consolidation process - as you already know

Understood sir, Thanks a lot :)

You're welcome