Subsidiary`s post acquisition profits

Ttraceylove214y ago

Hi please help me out. when calculating NCI and group retained earnings, there are instances were the sub`s acquisition profits uses the post acquisition profits i,e profit for the year and then there are instances were the calculations use the difference between the sub`s net assets at reporting date and the sun`s net assets at acquisition date.

how do i know when to use which item profit for the year or the difference between the net assets at acquisition and reporting date?

thanks

MikeLittleTutor14y ago#1

In the situation of a mid year acquisition, it's arguably quicker to calculate, and use, just the post acquisition profits on a time apportioned basis by applying the post acquisition period fraction to the year's profits.

Personally, I don't like the tabular format of Kaplan's working 2. But that's a personal preference of mine and their method obviously works

Sign into reply to this topic.