Consolidation and the FNST CBA

spursfan323
spursfan323 Registered Posts: 28 Regular contributor ⭐
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?

Comments

  • Steve Collings
    Steve Collings Registered Posts: 997 Epic contributor 🐘
    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
    spursfan323 Registered Posts: 28 Regular contributor ⭐
    Thanks Steve...don't you ever go to bed?! What would we do without you...?
    Best regards
    Elliot
  • Steve Collings
    Steve Collings Registered Posts: 997 Epic contributor 🐘
    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
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