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subsidary disposal

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › subsidary disposal

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  • May 22, 2019 at 5:04 pm #516902
    nothing123
    Member
    • Topics: 3
    • Replies: 0
    • ☆

    HI

    when disposing of a sub and using w4 NCI –

    do you use the percentage left when brought e.g. 20%
    or do you use the percentage after being sold e.g. 70%?

    EG:

    Proceeds 300m
    30% remainig 160m

    Goodwill – 30m (was 40m, but 10m impairment from year before)
    NA – 500m
    NCI (W4) should this be 87m + (Share of profits 20% x 88) or (Share of profits 70% x 88)?

    Gain/Loss
    Thanks

    May 24, 2019 at 7:55 pm #517217
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7065
    • ☆☆☆☆☆

    Hi,

    I’m a bit confused as the NCI cannot own 70% of the shares, as it would mean we do not have control.

    When disposing of a subsidiary in its entirety, the gain/loss on disposal calculation will use the NCI figure based on the holding just prior to the disposal.

    Thanks

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