Selling 50% of a level of consolidation
Posted: 20 Oct 2020, 12:34
Hi Guys,
Our company has one subsidiary lets call it Child 1 we hold at 100% (full consolidation). This Subsidiary has two other subsidiaries that it holds at 100%, lets call them Grandchildren 1 (Full consolidation) and Grandchildren 2 (Full consolidation).
Our company plans to sell 50% of the Child 1 to another company, we will transit from full consolidation into equity method for child1 and as a consequence, GC1 and 2 will be out of the scope.
In order to calculate the gain&loss from this opération, I have to compare the price consideration paid with the carrying amount of those entities. From my opinion, for the carrying amount, I should take :
Equity of Child 1 + equity of grandchild 1 + 2, add them together.
I think that I should take the Equity of child 1 before consolidation and equity of grandchild 1 + 2 after consolidation, like if I was doing a intermediate level consolidation.
My question is that I'm not sure that I should take the equity of child 1 before or after consolidation.
So what(s your opinion on this please, do I have to take vision of the equity of child 1 after consolidation + GC 1 + 2 after consolidation
or
CHild 1 before consolidation + GC 1 + 2 before consolidation.
Thank you.
BR
Our company has one subsidiary lets call it Child 1 we hold at 100% (full consolidation). This Subsidiary has two other subsidiaries that it holds at 100%, lets call them Grandchildren 1 (Full consolidation) and Grandchildren 2 (Full consolidation).
Our company plans to sell 50% of the Child 1 to another company, we will transit from full consolidation into equity method for child1 and as a consequence, GC1 and 2 will be out of the scope.
In order to calculate the gain&loss from this opération, I have to compare the price consideration paid with the carrying amount of those entities. From my opinion, for the carrying amount, I should take :
Equity of Child 1 + equity of grandchild 1 + 2, add them together.
I think that I should take the Equity of child 1 before consolidation and equity of grandchild 1 + 2 after consolidation, like if I was doing a intermediate level consolidation.
My question is that I'm not sure that I should take the equity of child 1 before or after consolidation.
So what(s your opinion on this please, do I have to take vision of the equity of child 1 after consolidation + GC 1 + 2 after consolidation
or
CHild 1 before consolidation + GC 1 + 2 before consolidation.
Thank you.
BR