FNST practice CBT

davejvh Registered Posts: 19 New contributor 🐸
from the AAT FNST practice cbt [here]:

exert from 2nd task, question 1.5
Claw PLC acquired 90% of the issued share capital and voting rights of deer ltd on 1st april 20x0
from statements of comprehensive income other income: claw plc £1,800, deer ltd £0
from data: other income of claw plc included a dividend received from deer ltd. Deer ltd had paid a dividend of £1,710 on 17th March 20x1

so my working for other income in the consolidated statement:

claw owns 90% of deer so 90% of 1710 is £1539 claw’s dividend rec’d.
so other income for consolidated statement should be £261? (1710-1539)

am I wrong?


  • AmyRichardson
    AmyRichardson Registered Posts: 89 Regular contributor ⭐
    I was always told to take out dividends - because you cant pay dividends to yourself!

    so no need for the working??????

    Not sure though so dont take my word for it :)
  • keane155
    keane155 Registered Posts: 404 Dedicated contributor 🦉
    I'd say leave the dividends out too.
  • davejvh
    davejvh Registered Posts: 19 New contributor 🐸
    @keane @amy thanks for replying :)

    thing is, it says "included in the other income is the dividend", implying the "other income" doesn't just consist of the dividend, right? especially as the dividend paid is £1710 and the other income is £1800.

    so surely some "other income" from the parent should be included? Is it me or does it not make sense to eliminate the whole £1800?

    also, the parent company cannot have received the whole £1710 dividend, 10% of it went to the other shareholders....

    that's why I did the above working. If you were to take out the whole £1800, why would the question disclose the dividend paid and the % the parent owns? without that data you would assume the £1800 was all dividend. Or if the total dividend paid by the subsidiary company was £2,000, 90% of it would have been £1800 which went to the parent company and that would make sense to me.

    Am I just thinking backwards?
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