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hi
was wondering if you could help me understand what happens in p&l when a Parent has an associate but buys more share and ends up turning that into a sub. the bit I am very confused about is if there is an increase in the FV of existing interest in SOFP that goes in the group retained profit. but what happens to it in the SPLOCI? So if referring to chapter 7 example 1 – ((Jeremy). so there is gain on existing interest from 40 – 52 so total of 12. how do we treat this in group SPLOCI? I am really struggling with this. any help will be appreciated.
thanksSo the gain of whole 12 million? And where will it go within p&l? The reason for my confusion is I saw a similar question and on there they have a line as if they have sold the associate which is FV of net assets at acquisition date less the carrying amount of the associate. So the figure ended up being gain but less the profit the associate had made since acquisition. Not sure if my question makes sense. But would be grateful if you could clarify a bit more.
Sorry it wasn’t Fair value of net assets it was fair value of existing interest (that had gone up) less the carrying amount of the associate(which was the cost plus profit since acquisition)
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