- 5 Marks
FR – May 2019 – L2 – Q1c – Associates and Joint Ventures (IAS 28)
Explain the accounting treatment of an associate's results in separate and consolidated accounts.
Question
Abuja Plc, a company with a subsidiary, acquired 7,500,000 shares out of the 30 million ₦1 ordinary shares in Abaji Ltd for ₦15 million on 1 January 2018. In the year to 31 December 2018, Abaji Ltd earned a profit after tax of ₦6 million, from which it declared a dividend of ₦1,500,000.
Required:
Explain how Abaji Limited’s result should be accounted for in the separate and consolidated accounts of Abuja Plc for the year ended 31 December 2018.
Find Related Questions by Tags, levels, etc.
- Tags: associate company, consolidated accounts, Equity Accounting, separate accounts
- Level: Level 2
- Topic: Associates and joint ventures
- Series: MAY 2019
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