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Impairment loss entries in the accounts

How is an impairment loss on an investment shown in the accounts?

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Client is a holding company and it bought the shares in a trading company a few years ago.

The subsidiary company value has fallen considerably and needs to be revalued by £50k to £250k. 

How do I show this in the P&L account? And I'm assuming I disregard it in the tax comp?

This is the only client I have set up in this way and so haven't ever come across this before so any advice most appreciated.

Many thanks

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Hallerud at Easter
01st Mar 2021 23:28

Dr Comprehensive Income
Cr Asset

(Albeit not as simple if previous upward revaluation of the asset)

You do not say under what framework the company is reporting, is it FRS102 or something else? Nor do you say whether your question is re the individual accounts for the holdco or its consolidated accounts so my answer is accordingly somewhat vague.

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By paul.benny
02nd Mar 2021 08:28

FRS102 and 105 can be downloaded for free from the FRC website. You might find it helpful to read the instructions therein on accounting for impairments.

Not the question asked, but I wonder how you have determined the impairment. The standards also provide guidance on calculating impairments.

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