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Hi,
I’m struggling with fully disposing a subsidiary if anyone could help.
When sell, I eliminate the investment,include the consideration and put profit (&tax) on disposal to R/E (via P&L) for the parent. I think I’m happy with this part.After this I do another comp for profit on disposal for the group. This goes into P&L but where is the corresponding entry? If R/E then am I not double counting the profit on disposal?
Thanks for any help.
Hi,
I’d not think too much about the journal entries as it is a bit too confusing but the CR is to the profit on disposal but just be aware that the profit for the group appears in the group accounts and not in the individual accounts. This would mean that there is no double counting of any profit.
Other parts of the double entry would be to record the proceeds, remove the assets/liabilities of the sub, the goodwill and NCI.
Thanks
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