Parent's financial statements and group financial statements
You'll learn how to calculate gains or losses on disposal when a parent company sells a subsidiary, and understand the different treatments in parent company and group financial statements.
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In this lesson
- 0:00 Group disposals overview
- 0:18 Parent company gain or loss calculation
- 1:27 Group financial statements impact
- 2:51 Group gain or loss on disposal formula
- 4:02 Supporting calculations and workings
- 6:47 Worked example: Cobbler Co disposal
- 10:20 Key takeaways and exam technique
About this lesson
This session covers the key mechanics: in the parent's separate statements, you calculate disposal gains using proceeds minus the investment's carrying amount; in the consolidated statements, you must account for the subsidiary's net assets, any remaining goodwill, and the noncontrolling interest at the date of disposal. You'll also discover how to work backwards to find carrying values of goodwill after impairment and to roll forward the noncontrolling interest to the disposal date. These calculations are essential for FR and SBR exam questions involving subsidiary disposals.
Duration: 13m
Transcript
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