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Hello tutor,
Kindly asking you to help me understand why we don’t compute the gain on the 40% initial acq by substracting from the current FV the initial cost of the 40%? Instead, we take into account the increase in net assets, which is added to the initial cost of the 40%.
Many thanks.Gain will be FV less CA
Using equity accounting (as they will have done in the group accounts) CA = Cost + % post acq profits (which will be the same as % in NA)
Sorry if it’s stupid question, the text states that ‘Sugar did not pay any dividends during the year’. On the other side, when computing the CF from financing activities, ‘dividends paid to NCI’ are computed as a balancing figure when playing with NCI b/f and NCI c/f. I’m trying to understand where I’m getting wrong in reading the exhibit.
Many thanks.
If sub did not pay any dividends there will be no dividend to the NCI of that company.
BUT
As there a NCI balance at the start of the year I assume that there are other subs and the div to NCI must relate to them.
I agree that I was a bit confused at first when looking at the question.
🙂
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