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Consolidated financial statements I

Working 5 – Retained earnings

(W5) Retained earnings

$
Parent X

Subsidiary (% × post-acquisition reserves) (W2) X
PURP adj (if P sells to S) (X)

Associate (% × post-acquisition reserves) (see next chapter) X
–––––

X
–––––

Key issues

Look to see if a PURP adjustment is required if sales were made by the
parent to the subsidiary.

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