• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

Polestar Southstar – retained earnings

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Polestar Southstar – retained earnings

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by P2-D2.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • June 30, 2020 at 4:30 pm #575541
    anniebabe
    Participant
    • Topics: 33
    • Replies: 102
    • ☆☆

    So, I have managed to get myself in a muddle with mid year acquisitions.
    Can anyone help?

    01.04.03 Polestar acquired 75% of Southstar, Year end is 30.09.03
    P S
    Profit/Loss for Year 10000 (4600)

    SOFP
    Retained Earnings 28500 12000

    Goodwill
    retained earnings 12000
    pre acq loss (4600)/12*6 (2300)

    Retained earnings P S
    at year end 30.09.03 28500 12000
    pre acq -12000
    pre acq loss – 2300

    if we bought them in April 03 and year end is September 03 – why is the full $12000 at acquisition in goodwill. and removed in sofp?

    thanks

    July 5, 2020 at 7:58 am #576022
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7163
    • ☆☆☆☆☆

    Hi,

    The question requires you to calculate the post-acquisition retained earnings to go in the NCI and group RE calculation. As the acquisition happened this year then this is simply the 6/12 of the 4,600 loss for the year.

    We will also need to calculate the net assets at acquisition too, which will appear in the goodwill and NCI calculation, as it is not given in the question. To work out the retained earnings at acquisition we start with the retained earnings at the reporting date of 12,000 and we remove the loss since the acquisition date. This loss is the 6/12 of the 4,600, which is added back as a loss will have reduced the retained earnings since acquisition.

    Hope that helps.

    Thanks

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • dkessilfie on FM Chapter 1 Questions – Financial management objectives
  • ahmadhoney on ACCA Advanced Audit and Assurance (AAA) The Audit Report 3: Types of Audit Report
  • Bimasha@123 on Discounted Cash Flow Techniques – ACCA Advanced Performance Management (APM)
  • Ken Garrett on Discounted Cash Flow Techniques – ACCA Advanced Performance Management (APM)
  • Bimasha@123 on Discounted Cash Flow Techniques – ACCA Advanced Performance Management (APM)

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in