Retained earnings of subsidiary — OpenTuition Forums

PPetarSupporter7y ago

Dear Sir, In case that we are consolidating Group accounts, in retained earnings we are including parent portion of subsidiary profit for the period. In case that subsidiary profit includes intercompany sales and cos is that adjusted in consolidated retained earnings (not PUP, just intercompany parent and sub sales and cos)? Thanks, Petar

P2-D2Tutor7y ago#1

Hi, You just need to follow the standard working for the subsidiary net assets and this will allow you to calculate the subsidiary's post-acquisition retained earnings. This working will have to be adjusted for fair value adjustments and PUPs, if the subsidiary is the seller. Thanks

PPetarSupporter7y ago#2

Thanks. If subsidiary statutory profit is 100 but upon PL consolidation it is 80 (removing eg ico sales), are we using 100 or 80 in calculation of consolidated retained earnings as our share of subsidiary profit@ Best regards, Petat

P2-D2Tutor7y ago#3

Hi, Intra company sales are only adjusted in the group profit and loss, there is no requirement to adjust the post-acquisition profits as there is no impact upon them. Thanks

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