Consolidation and the FNST CBA

spursfan323

Sat my FNST CBA today and found the Consolidation question a little tricky.

Please see attached PDF-

We were taught to use the layout at the top for our workings.

However, in the CBA, you are only provided the next 2 sets of dropdown boxes.
Note they only give one line for Retained earnings!

My question is: what figure should we use in the Goodwill workings for 'Retained earnings'? Is it £48 as per the top workings (as I was always taught), or is the combined Ret. earnings i.e. £48+16?

Steve Collings

Hi,

For the goodwill calculation you would use the $48 as this forms part of the net assets the parent is buying. The $16 post acq would go in the consolidated retained earnings figure.

Best wishes
Steve

spursfan323

Thanks Steve...don't you ever go to bed?! What would we do without you...?
Best regards
Elliot

Steve Collings

spursfan323 wrote: »

Thanks Steve...don't you ever go to bed?! What would we do without you...?

Haha!! I do have a life outside the world of accountancy, believe it or not!!

Try and forget about IAS's/IFRSs and consolidations for now!!!

Cheers
Steve