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
Question 1 Explain the five accounting concepts with an example Separate entity concept Going concern concept Money measurement concept Cost concept Dual aspect

Q. Retained earnings is increased by each of the following except a. some disposals of treasury stock. b. net income. c. prior period adjustments. d. All of these increase retained

Q. Conclusion on Overtrading? The majority of the evidence suggests that our company is moving into an overtrading situation, although the evidence is not conclusive. Current p

Consider the expected return and standard deviation of the following two assets: Asset 1: E[r1]=0.1 und σ1=0.3 Asset 2: E[r2]=0.2 und σ2=0.4 (a) Draw (e.g. with Excel) the

Your mother-in-law is fretting about paying her mortgage. She refinanced her mortgage loan a while back, and now is thinking about refinancing again. You are going to help her eval

What is bargain purchase? Financial assets acquired for less than FMV. In a bargain purchase BC, a corporate entity is acquired by another for an amount that is less than the


Q. Corporate Enterprise group? In order to have better and systematic participation of labour in management for improvement in working of Railway system and appropriate changes

A____ is a loss to the business and a gain to the debtor

a recommendation regarding the current south African vat system