Page 324 - F2 Integrated Workbook STUDENT 2019
P. 324
Chapter 14
Example 14.3
Thin has held 60% of Duke for several years, using the fair value method to
value the non-controlling interest. Half of the goodwill has been impaired. The
group's year end is 31 December 20X5. A disposal of this entire investment has
been made on 31 October 20X5. The proceeds received from the disposal were
$40,000.
Details are:
$
Cost of investment 24,000
Duke – Fair value of net assets at acquisition 8,000
Duke – Fair value of NCI at acquisition 4,000
Duke – Net assets at disposal 12,000
Duke – Fair value of a 30% investment at disposal 15,000
The tax rate in Thin’s jurisdiction is 25%.
Calculate the profit/loss arising:
(i) in Thin's individual accounts
(ii) in Thin’s consolidated accounts (ignore tax impacts)
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