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sir i wanted ot understand why the examiner has used this method to find gain on disposal: 10+ 3.5-12=1.5, not that i don’t understand this method, i completely do get this method. but my bone of contention is that profit/loss figure we get hence, is used for inclusion in CONSOLIDATED SPL.
and so instead of that we should, have used disposal proceeds less cost or carrying amount of investment(i.e. $10-12×45/60=$1m gain) , the precise method we use to calculate gain/loss for inclusion in INDIVIDUAL OR SEPERATE FINANCIAL STATEMENTS
Please refer to the examiner’s answer where the logic is explained……………..because the remaining interest must be measured at FV.
Never seen that point examined – and I suspect it will be another 35 years before is is examined again.
In SBR they seek to see how students react to a situation that they have never seen before- very few candidates would have thought of that – it’s certainly not a pass or fail point.
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