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Hello
When there are changes in group structure throughout the financial year, ie from subsidiary to associate, for instance from 60% to 40% ownership, how do you account for assets, equity, liabilities in consolidated statement of financial position?
What I mean is when you acquire a subsidiary, all assets & liabilities are consolidated line by line. But when there is partial (or full) disposal, do you apportion subsidiary’s balance sheet items up to date of disposal or still consolidate in full?
It’s the only bit that is unclear to me, hope it makes sense! Couldn’t find this specific answer anywhere else..:(Thanks
RitaYou would only consolidate up to the date of the disposal. When you dispose of the holding and are no longer in control of the subsidiary, you would calculate a profit or loss on disposal and account for the remaining holding as an associate.
No consolidation on statement of financial position would occur if control were lost which would likely be the case if number of relevant voting shares dropped from 60 to 40 percent.Consolidation would still have to occur in statement of profit and loss up to loss of control date on line by line basis and gain or loss on disposal would have to be calculated and presented.In case you have stated it would likely be considered an associate and equity accounted for at fair value from date of loss of control of subsidiary.
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