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Disposal of sub-subsidiary

Forums › ACCA Forums › General ACCA Forums › Disposal of sub-subsidiary

  • This topic has 1 reply, 2 voices, and was last updated 5 years ago by Kim Smith.
Viewing 2 posts - 1 through 2 (of 2 total)
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    Posts
  • September 1, 2020 at 4:18 pm #583038
    justmaxis
    Member
    • Topics: 2
    • Replies: 0
    • ☆

    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$.

    September 1, 2020 at 4:42 pm #583043
    Kim Smith
    Keymaster
    • Topics: 138
    • Replies: 8443
    • ☆☆☆☆☆

    You need to post this to an appropriate forum – choose exam (FA, FR or SBR) and whether you want a fellow student to respond or ask the tutor.

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