Question

pre-acquisation dividend​

Answer 1

Answer:

Pre acquisition dividend is the dividend received out of pre-acquisition profits. Pre-acquisition profits are the reserves which exist in a subsidiary company at the date when it is acquired. Post-acquisition profits are profits made and included in the retained earnings of the subsidiary company since acquisition.

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Answer 2

Explanation:

Therefore, when the dividend is subsequently paid ( and received by the parent ) is it being paid out of pre-acquisition profits?

I don’t know and I have to leave here in the near future. But, if I can face the prospect, then I’ll come back to it later

Just as a reassurance, Steve Scott very rarely asks a problem involving pre-acquisition dividends and, when he does, the dividend was not proposed as at the date of acquisition.

hope it helps you .

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