A parent company may dispose all or part of its subsidiary’s shares during a financial year.

Give a detailed discussion on the appropriate accounting treatment for the disposal of subsidiary’s shares.


In particular, you should analyse this one scenarios:

Tthe parent company remains control over the subsidiary after the disposal

Provide examples to show (with journal entries and calculations) how the disposal should be presented in the parent’s separate financial statements and in the group’s consolidated financial statements. Ignore tax effects.

Make up an example is alright.

Answer rating: 100% (QA)

1When loses control over the subsidiary should derecognize all the asset and liabilities of the subsidiary from the date of disposal and should elimin... View the full answer