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gain/loss on acquisition of NCI stake

This topic has 1 reply, 2 voices, and was last updated 1 year ago by Stephen Widberg.

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May 21, 2021 at 7:34 am #621278
Noah098
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sir why do we say that no profit or loss arises if additional shares have been acquired(from NCI)/disposed(by parent entity- which holds more than 50%) in the consolidated financial statements??
And if no profit or loss is calculated then WHAT DOES OTHER COMPONENTS OF EQUITY balancing figure shows? does not it shows the gain/loss on worth of NCI acquired v/s what was paid for it or vice-versa?
May 21, 2021 at 9:48 am #621297
Stephen Widberg
Keymaster
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We say it is because IFRS 3 insists that we say it. I don’t like it any more than you. 🙂
Logic is that we should only recognise a profit or loss if there is a loss of control.
Your second statement is correct – but don’t start banging on about reserves in the exam!
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