Dissolving a subsidiary that has impairment - IFRS

How would you treat a company being dissolved from the parent point of view?

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Company A owns Company B.

Company B is being dissolved.

What happens to the investment in Company A if let's say it had £100m as an investment and £50m accumulated impairment on that investment. They would both need to go to 0 but what would the double entry be when reporting under IFRS?

When the original impairment happened, it was DR PL, CR Accumulated impairment on investment which was a few years ago.

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By johngroganjga
25th Feb 2024 07:40

You don’t say what value the holding company is going to receive from its liquidated subsidiary. Suffice it to say that it will recognise a loss or a gain by reference to that figure and its existing carrying value net of the historic impairment provision.

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By paul.benny
25th Feb 2024 09:02

Is this a homework question? Maybe tell us what you think the entries should be before asking us to do all the work for you.

And a hint: you'll also have to stop consolidating B and that may involve eliminating goodwill and possibly any other intangibles.

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