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Hi Mike, please my question is about change in ownership. so if a parent company dispose off a subsidiary (say move from 65% to 40%) and then retain only a significant interest. i know that they should account for the new holding as an associate.my question is, do we prepare a group account but don’t consolidate line by line and just include a one line of the associate in the balance sheet or do we just put the associate in the parent company’s balance sheet without a group account statement. Thanks for your help.
If the significant investment is the only investment ie there is no subsidiary now owned by the “parent” then group accounts will not be prepared (the investment with significant influence is NOT a group company) so no consolidation, no group accounts and the investment will be shown in the parent at fair value as at the date of the disposal from subsidiary down to investment.
It’s unlikely at P2 – more likely a disposal down to an associate and still have another investment which is a subsidiary (a different company) In that situation, group accounts WILL be prepared because there is a group (parent and subsidiary) and the significant influence investment treated as an associate within those group accounts
OK?
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