RETAINED PROFITS BROUGHT FORWARD-group accounts, Financial Accounting

RETAINED PROFITS BROUGHT FORWARD

If we recall from the consolidated balance sheet, the group-retained profits should be made up of the holding companies retained profit plus the holding companie’s share of subsidiary companies post acquisition retained profits. The same case applies to computing the retained profits brought forward of the group. The group-retained profits brought forward should be made up of the holding companies retained profit brought forward plus the holding companie’s share of subsidiary companies post acquisition retained profits brought forward.

But we have to make adjustments to the holding companies retained profits brought forward and the subsiairy company’s profits before we get the holding companies sher. The adjustments are for transactions that took place previously that affect the profits of these two companies.

The holding companies retained profits brought forward will therefore be adjusted as follows:

 

£

£

Holding companies retained profit brought forward

 

X

Add: Excess depreciation charged by holding company up to start of the year

 

X

 

 

x

Less : Unraelised profit on opening inventory if holding company had made the sale

x

 

          Goodwill impaired to date (up to the start of the yaer)

x

 

         Unrealised profit on sale of PPE in previous years if holding co. made the sale

x

(x)

Holding companies retained profit b/f  adjusted for conslidation

 

x

 

The subsidiaries profits brought forward will be adjusted as follows before the holding company takes its share:

 

£

£

Subsidiary companies retained profit brought forward

 

X

Add: Excess depreciation charged by subsidiary company up to start of the year

 

X

 

 

x

Less : Unraelised profit on opening inventory if subsidiary company had made the sale

x

 

          Depreciation on Fair value adjustment that should have been charged to date

x

 

         Unrealised profit on sale of PPE in previous years if holding co. made the sale

x

(x)

Subsidiary company’s retained profit b/f

 

x

 

Posted Date: 12/12/2012 4:54:16 AM | Location : United States







Related Discussions:- RETAINED PROFITS BROUGHT FORWARD-group accounts, Assignment Help, Ask Question on RETAINED PROFITS BROUGHT FORWARD-group accounts, Get Answer, Expert's Help, RETAINED PROFITS BROUGHT FORWARD-group accounts Discussions

Write discussion on RETAINED PROFITS BROUGHT FORWARD-group accounts
Your posts are moderated
Related Questions
what is a maximum leverage ratio covenant designed to control

The Garraty Company has two bond issues outstanding.Both bonds pay $100 yearly interest plus $1,000 at maturity. Bond L has a maturity of 15 years, and Bond S a maturity of 1 year.

Personal representatives duties Personal representation has the following duties; 1) To provide and pay out of the estate of the deceased, the expenses of a reasonable funeral

Prepare an Excel spreadsheet containing the following: - Construct the next five-year pro-forma statements (income statement and balance sheet). - Estimate annual F

Order Point Formula The analysis discussed above tends to be somewhat cumbersome when probability distributions are most complex and dependent and multi-period cases are involv

Mr. Wong currently running a small manufacturing business.  The Trial Balance of the business at 31 March 2011 is as follows:

The construction manager for Acme, Inc. must decide whether to build single-family homes, apartments, or condominiums. She estimates annual profits will vary with the economy, as f

1. According to the notes to the financial statements, what method or methods does the company use to depreciate "plant and equipment?" What rate does it use to depreciate plant an

Q. What is Audit Sampling? Audit Sampling - Application of an AUDIT procedure to less than 100% of items within anaccount BALANCE or class of transactions for purpose of evalua

CHARACTERISTICS OF PARTNERSHIP