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Thank you Mike~
1)
Like in 06/2014 Q1, it says:
“Marchant disposed of an 8% equity interest in Nathan on 30 April 2014 for a cash consideration of $18 million and had accounted for the gain or loss in other income. The carrying value of the net assets of Nathan at 30 April 2014 was $120 million before any adjustments on consolidation. Marchant accounts for investments in subsidiaries using IFRS 9 Financial Instruments and has made an election to show gains and losses in other comprehensive income. The carrying value of the investment in Nathan was $90 million at 30 April 2013 and $95 million at 30 April 2014 before the disposal of the equity interest.”the answer calculates the movement in equity like this:
($18 – (8%/60% of $95m)) = $5·3m (it does not use the 120 million carrying value of the net assets to calculate)However, in 06/2010 Q1 note 1, it also says:
“Ashanti disposed of a 10% equity interest to the non-controlling interests (NCI) of Bochem on 30 April 2010 for a cash consideration of $34 million. The carrying value of the net assets of Bochem at 30 April 2010 was $210 million before any adjustments on consolidation. Goodwill has been impairment tested annually and as at 30 April 2009 had reduced in value by 15% and at 30 April 2010 had lost a further 5% of its original value before the sale of the equity interest to the NCI. The goodwill impairment should be allocated between group and NCI on the basis of equity shareholding.”the answer calculates the movement in equity like this:
($34 – (Net assets per question at year end $210m + Fair value of PPE at acquisition $10m – depreciation of fair value adjustment $4m + goodwill (44 – 8·8)) x 10%) = 8.8
Here the answer does use the 210 million carrying value of the net assets to calculate, and does not tell us the the carrying value of the investment in BochemYou can refer to this link: https://opentuition.com/topic/marchant-062014-q1/, where trina also asked this question, but I cannot understand it.
Thank you so much ^_^