Retained Earning Consolidated SOFP

I'm struggling to understand why some questions seem to split out the pre and post acquisition retained earnings to calculate on the SOFP and some don't.
So for the attached I split out the RE as pre acqn £6600 & post £1600 but according to the answer this is wrong? To calculate the RE you just multiply £8200 by 40% (NCI)??

Which is correct?

Comments

  • Pian32
    Pian32 MAAT Posts: 448
    Do you have an example of the reverse position. Only because it might be helpful to be able to look a the differences in the actual question that would point to the method needed.

    The NCI in this question is valued at 40% so it'll be 40% of the end of year figures. Including the 40% of NC assets.
    AAT Level 4, MAAT
    ACCA in progress
    F4- Passed Aug 2020
    F5- Passed Dec 2020
    F6- Passed Sep 2020
    F7- Passed June 2021
    F8 - Planned Sep 2021
    F9 - Passed June 2021
  • Mattataa
    Mattataa Registered Posts: 3
    This question takes the total retained earnings, deduct pre acqn RE and then work out the share. I understand its slightly different because the previous example was for the NCI, but what i dont get is why is it 40% of the total and not 100% of the pre acqn RE & 40% of the post RE?
  • Pian32
    Pian32 MAAT Posts: 448
    I can't see the 2nd question. I'm assuming it didn't post correctly. I'm going to guess it's to do with how the shares were issued. In the second question are the shares new?

    In the 1st question existing shares are bought which will include the appropiate amount of RE as they would be allocated to the previous share holders. If in the 2nd new shares are issued that could be the difference.
    AAT Level 4, MAAT
    ACCA in progress
    F4- Passed Aug 2020
    F5- Passed Dec 2020
    F6- Passed Sep 2020
    F7- Passed June 2021
    F8 - Planned Sep 2021
    F9 - Passed June 2021
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