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    #1

    Sep 8, 2009, 02:06 PM
    Flotation cost incerse retained earnings?
    If flotation costs increase I believe that retained earnings will stay the same. Right? Just need clarification
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    ROLCAM Posts: 1,420, Reputation: 23
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    #2

    Sep 13, 2009, 06:12 AM

    It is the opposite.
    Any additional costs whether they are
    Floatation costs or not will REDUCE earnings.
    Floatation costs can be capitalised in the form of GOODWILL.
    May be that is why you are confusing the issue.
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