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Chapter 21

Disposals

2.1 Disposals in individual financial statements

When a company sells shares in another company then a profit or loss will arise in
the individual financial statements. This is calculated as follows:

$m
Proceeds X
Carrying amount of shares sold (X)
–––––
Profit/(loss) X/(X)
–––––

This profit or loss must be removed when consolidated financial statements are
prepared.

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