Page 313 - F3 -FA Integrated Workbook STUDENT 2018-19

Consolidated financial statements I

Working 5 – Retained earnings

(W5) Retained earnings of group at reporting date:

$000
Parent retained earnings (1) X

Subsidiary (Group % × post-acquisition reserves) (W2 (2) X
(3)
Less: PURP adj (if P sells to S) X
––
X To SOFP)

––

Key issues

(1)
Ref = information identified in parent SOFP Look to see if a PURP
adjustment is required if sales were made by the parent to the
subsidiary.

(2)
Ref = identified from the movement in the subsidiary’s net assets
between the date of acquisition and the reporting date.

(3)
Ref = information included in notes to the question and will usually
require calculation – see more detail in this chapter.

Example 1 hat follows will be used throughout this chapter to demonstrate the
application of the workings required to prepare a statement of cash flows.

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