We are looking at selling an asset owned by one subsidiary to another, its an internally developed project, we have an external independant valuation of it that is considerably above its development costs - so I am happy that the value attributed to it is correct.
What is the correct accounting in both companies, is the gain on disposal a gain that should be recorded in the same way as disposal of a regular asset? Or is the gain a revaluation ? In which case a revaluation reserve would be shown in the aquiring company and the transfer recorded at cost?
The figures involved are signficant.