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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
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
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