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Q Jocatt Kaplan

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Q Jocatt Kaplan

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by Stephen Widberg.
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    Posts
  • July 8, 2020 at 3:16 pm #576346
    Sneha00
    Member
    • Topics: 46
    • Replies: 20
    • ☆☆

    In que, a part its written that

    “On 1 December 20X1, Jocatt acquired 8% of the ordinary shares of Tigret for $4 million and recorded it as a financial asset at the cost of purchase. This investment was designated to be measured at fair value through other comprehensive income.
    On 30 June 20X2, Jocatt acquired a further 52% of the ordinary shares of Tigret and
    gained control of the company.”

    My confusion is that
    In answer when there is Fair value change for investment on the date of additional 52% shares purchase the gain of 1m (5-4) on FV to 5m of financial asset should be transferred to OCI but in answer they have transferred the gain to P&L
    Please explain this

    Thanks

    July 9, 2020 at 5:14 pm #576441
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3396
    • ☆☆☆☆☆

    It sounds to me like the answer is out of date

    That would’ve been the rule when this question was written

    Nowadays the gain or loss on revaluation is not recycled to P&L

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