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can i know why the Available for Sale Financial asset (AFS) of 3 (ie 6* 6/12) not shown in OCI
And why is there an adjustment in admin expenses stating AFS 3?
Hi,
This is a gain in the associate and so is equity accounted for. We therefore take 30% of 6/12 of 6, which gives 0.9 and is in the answer.
I think it is the realisation of half of the gain that is held in OCI. Once the subsidiary becomes an associate we would recycle any gains made. I doubt anybody in the exam got this point so I wouldn’t worry about the finer details.
Overall this question was ridiculously difficult and you’ll find that subsequent group SPLOCI questions have been more straight forward.
Thanks
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