Profits in subsidiary company-group accounts, Financial Accounting

Profits in subsidiary company

The remaining profits that belong to the holding company should be split between pre-acquisition profits and post acquisition profits.

The pre acquisition profits are the profits in the subsidiary company on the dare of acquisition and are thus used in computing goodwill.

The post acquisition profits relate to the period after acquisition and can thus be distributed or can be paid out to the shareholders of the holding company. They should thus form part of the group retained profits.

Posted Date: 12/12/2012 2:34:46 AM | Location : United States

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