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I m stuck on the grange question i.e. grange owned 100% interest of sitin on cash consideration $39m. Later, grange sold 60% of sitin at $23m and fair value of remaining shares is now $13m. In the separate financial statement of grange, it recognize remaining interest as $16m (39-23). How profit will be recorded in separate financial statement of grange?
My answer is : Sales proceed = 23m
Less:carrying value of investment disposed= (23.4)m
(39/100*60=23.4)
Less: changes in fair value of remaining holding=(3)m
(16-3=3m)
loss on disposal=(3.4)m
I think in separate financial statement of grange should recognize $3.4m while calculating impairment of parent itself instead of $3m. i confused why only changes on fair value of remaining interest i.e $3m was included while calculating the impairment of parent(only grange)? please help me.Hello razess,
(0.4m) is the separate disposal loss
(3m) is impairment loss
(6m)is the consolidated disposal lossIn separate F/S, we need to recognise the first two,
But in consolidate F/S, we need to recognise the last two in the accounts.
And the impairment loss can’t be included as disposal loss account.This is what i think.
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