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Hello,
Sometimes we have the RE at acquisition given and others we dont. How is the RE at acquisition calculated?
I am super lost with question 398 from KAPLAN regarding getting the right number ..Thanks in advance!
Hi,
If we are not given the retained earnings at acquisition then we will need to look at the retained earnings at the reporting date and deduct the profits made since acquisition.
The other alternative is to take the opening retained earnings figure and add on the profits made up to the acquisition date.
to work out the profits added or subtracted will involve pro-rating the profit for the year figure from the statement of profit or loss.
Hope this helps with the question in the kit.
Thanks,
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