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Disposal of subsidiary

AAsriel5y ago
In the group accounts the formulae is as follows: Proceeds X Add: FV of investment still held X Add: NCI X Less: Net Assets X Less: Goodwill X -------- Profit/(Loss) on disposal X Could you give eg with question on FV of investment still held as I do not understand why is it add to sales disposal. Thank you very much
P2-D2P2-D2Tutor5y ago#1
Hi, The subsidiary has been disposed of in its entirety and is no longer consolidated, hence why we deduct the net assets and goodwill in full (100%). The proceeds received only relate to our share of the assets and liabilities (70%, say) and the group has disposed of all of them (100%), hence why we need to add on the value of the NCI (30%) to get the true/full worth of the subsidiary being disposed of. Thanks
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