Page 321 - F1 Integrated Workbook STUDENT 2018
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Consolidated Statement of Financial Position
(W2) Net assets of subsidiary
The purpose of W2 is to establish the net assets of the subsidiary at
acquisition in order to calculate the goodwill amount in W3 and to identify the
post-acquisition profit that belongs to the group in W5.
In this case the acquisition date was 31 December 20X0 which was the same
as the reporting date so the columns include the same figures. The share
capital and retained earnings are taken from the subsidiary's individual
statement of financial position (SFP).
The accounting equation states that net assets = share capital + reserves.
The totals from the two columns are then used in subsequent workings.
Acquisition date Reporting date
$000 $000
Share capital 500 500
Retained earnings 200 200
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700 700
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