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Disposal of Subsidiary

Dr and Cr for group consolidation

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Parent Got Investment in 100 percent Sub = £100k

Sub sold = £200K

Goodwill - Nill (fully amortised)

NBV of Sub at disposal = (£1m)

Gain For Parent = £100K

Gain for Group - £1.2m

Sub balance sheet will not be part of consolidation. If we Cr £1.2m gain to P&L where the Dr side will go? If this go to retained earning of Balance Sheet, how would we balance the both side of balance sheet?


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By paul.benny
15th Sep 2020 07:03

The only P&L entry is the 100k gain in the parent.

In the consolidated accounts, you're no longer including the balance sheet of the subsid. The effect is that your consolidated retained earnings increase without any entry through the income statement.

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