Page 329 - F3 -FA Integrated Workbook STUDENT 2018-19

Consolidated financial statements I

Example 2d cont.

(W5) Group retained earnings at reporting date

$
(1)
Parent retained earnings 405,000
(2)
Subsidiary (Group % × post-acquisition reserves) (W2)
80% × ($251,000 – $211,000) 32,000
(3)
Less: PURP adj (if P sells to S) (2,500)
––––––

434,500 (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.

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