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hello Sir
i have following queries regarding minny
firstly I do not understand the reclassification of gain on puttin from OCE to retained earnings ( note iv)secondly in part c what does the term distribution of profit regarding 1m mean?
I was about to ask the same question. The original 14% investment in Puttin was designated as at fair value through other comprehensive income. I thought that the gain $3m should be recognized in “other comprehensive income” in the Statement of Profit or Loss and Other Comprehensive Income and hence in the “Other Components of Equity” in the Statement of Financial Position. Why does it have to be transferred from the Other components of equity to retained earnings?
I have same confusion about it as well. it was a equity investment designated as FVTOCI, and not be sold.
Or we treat 14% as it has been sold at FV when they acquired additional 16% share?
The gain or loss is recognised in profit or loss unless the equity interest previously held was an investment in equity instruments and an irrevocable election was made to hold the investment at fair value through other comprehensive income. In the latter case, in accordance with IFRS 9 (revised October 2010), the gain on derecognition of the investment is taken to other comprehensive income, or, in the SOFP, other components of equity.
I found this in the BPP Study Text.
The original 14% holding (not representing a significant influence) is deemed to have been sold for a profit of $3m. That gain cannot be credited to PorL but should be transferred within Statement of Changes on the revaluation to fair value for the purposes of determining the value of that 14% when it is increased to 30% on the second acquisition
Why? Because that’s what IFRS9 says we should do
Is that ok, or do you need more?
yes Sir thats ok one more thing why is dividend deducted from investment in associate ?
i am ok kwith reclassification of dividendInvestment in associate is calculated as “Cost of investment + share of post acquisition RETAINED – any impairment”
The dividend is not retained
Ok?
Can you please confirm my understanding –
Minny had designated as FV through OCI. However, when Minny achieved significant influence, the gain of previously held interest will transfer to RE, right ?I also have some questions on this.
Puttin: share of post-acquisition retained profits (W3) (4·5 – 2)
Dividend income from OCE 2·00 { Understand that dividend should not go to OCI but RE}But why -2 in share of post-acquisition retained profits ?
Dividend in that case was net off ?
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