Are retained earnings b/f always adjust by removing pre acq figure?
Reference is example 5 of chapter 10.i dont understand why the figure of retained earninng b/f has been this adjusted.
Many thanks
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Retained earnings brought forward
10y ago#1If the acquisition was earlier than last year, then yes
For example, we're consolidating to 31 December 2015 and we acquired in 2009
The retained earnings brought forward as at 1 January 2015 will be calculated by deducting the pre-acquisition retained earnings from the overall subsidiary retained earnings brought forward
Ok?
Thank you!
Hello Mike,
I will want you to explain this better. Why are we deducting per_acquisition retain earning after 7yrs of acquisition according to your example.
@mikelittle said: If the acquisition was earlier than last year, then yes For example, we're consolidating to 31 December 2015 and we acquired in 2009 The retained earnings brought forward as at 1 January 2015 will be calculated by deducting the pre-acquisition retained earnings from the overall subsidiary retained earnings brought forward Ok?</blockquoteHello Mike, I will want you to explain this better. Why are we deducting per_acquisition retain earning after 7yrs of acquisition according to your e
10y ago#5Because they are pre-acquisition!
And they always will be until we sell that subsidiary
And if we bought that subsidiary 50 years ago, we would still deduct the pre-acquisition profits that had been accumulated as at date of acquisition 50 years previously
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