Retained earnings of subsidiary

This topic has 3 replies, 2 voices, and was last updated 7 years ago by P2-D2.

Viewing 4 posts - 1 through 4 (of 4 total)

Author

Posts
December 25, 2018 at 9:25 pm #492709
pericazemun
Participant
- Topics: 6
- Replies: 9
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
December 26, 2018 at 10:02 pm #495774
P2-D2
Keymaster
- Topics: 4
- Replies: 7235
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
December 27, 2018 at 4:47 pm #499334
pericazemun
Participant
- Topics: 6
- Replies: 9
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
December 28, 2018 at 3:28 pm #499407
P2-D2
Keymaster
- Topics: 4
- Replies: 7235
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
Author

Posts

Viewing 4 posts - 1 through 4 (of 4 total)

You must be logged in to reply to this topic.