step acquisiton- no control to control

This topic has 3 replies, 2 voices, and was last updated 4 years ago by Stephen Widberg.

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July 20, 2021 at 2:31 pm #628919
Noah098
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sir i am kind of addled at the prospect of seeing a “gain on derecognition on disposal of an equity instrument” in the consolidated SPL, where the parent entity through a step-acquisition increases its stake from 10% to 60% during the accounting period.
(this gain relates to FV remeasurement on shares held under FVPL model. )

I mean why do we separately/additionally recognise it when preparing consolidated SPL? Would not it have been included in the individual financial statement of the parent entity already??
July 21, 2021 at 7:13 am #628962
Stephen Widberg
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It is recognised INSTEAD of parent’s gain.

Remember that you won’t be preparing a whole consolidation.
July 21, 2021 at 9:07 am #628979
Noah098
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sir can you pls elaborate? I apologise my cognitive faculties are too narrow to comprehend your answer
July 22, 2021 at 7:07 am #629068
Stephen Widberg
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Parent will show investment at cost or FVOCI – if the latter, there will be gains. These gains will not be in group accounts.

We aren’t going to be asked to prepare a full consolidation so don’t worry about reconciling parent and group.
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