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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
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Profit/(Loss) on disposal XCould 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
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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