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Disposal of sub-subsidiary

Forums › ACCA Forums › ACCA SBR Strategic Business Reporting Forums › Disposal of sub-subsidiary

  • This topic has 0 replies, 1 voice, and was last updated 4 years ago by justmaxis.
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  • September 1, 2020 at 5:28 pm #583046
    justmaxis
    Member
    • Topics: 2
    • Replies: 0
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    Group structure: A holds 60% in B, B holds 100% in C.
    A bought 60% share in B few years ago, when B already had 100% share in C.

    31 March 201X B sold 100% share in C for 35 000 $, net assets of C at date of transaction were 10 000$, goodwill related to C in A’s consolidated FS 12 000$. How this transaction will affect SCE in A’s consolidated FS?

    My calculations:
    Profit: Fair value of consideration received – net assets + NCI – goodwill
    35000-10000+4000-12000 = 17 000$
    Group share of profit from transaction: (35000-10000) *60%-12000(as goodwill fully related to group)=3000$
    NCI share of profit from transaction: 17000-3000 = 14000$

    Disposal of subsidiary with NCI: Net assets of C at disposal * NCI
    10000*((1-60%)*100%)= (4000)
    Summary:
    Two rows in SCE:
    Profit: Column “Retain earnings” – 3000; Column “NCI” – 14000
    Disposal of subsidiary with NCI: Column “NCI” – (4000)
    Total changes in equity of A after transaction is 13 000$

    Please help, Am I right in calculations?
    V.2 No disposal of NCI and profit from transaction is 13 000$.

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