Change in ownership without loss of control: equity transaction, adjustment of non-controlling interests and silences of the standard: Sorvet — purchase from third parties

Context

Brannel Group SA (fictitious entity) bought 15 points of Sorvet SA from third parties and sold 10 points of Delcour SA to third parties in 20X6, without losing control of either. You prepare the accounting note: difference in equity, adjustment of third parties, group policy and attribution of later results.

Assignment

Changes in ownership of Sorvet and Delcour without loss of control

Purpose of the workpaper

Describe the transaction with the third parties, list the carrying-amount base, the proportion acquired or sold and the fair value of the consideration, then compute the adjustment of the third parties and the difference attributed to the owners of the parent: no profit or loss and no additional goodwill. Where the standard is silent (goodwill, accumulated other comprehensive income, transaction costs), document the group’s policy without presenting it as imposed by the standard.

Questions of the file covered by this workpaper

• Do the two transactions cause a loss of control? How are they accounted for and what profit or loss do they give?
• Sorvet: compute the carrying amount of the non-controlling interests acquired.
• Sorvet: compute the difference to charge to the equity of the owners of the parent.
• Delcour: compute the part of the carrying amount of net assets passed to third parties by the sale.
• Delcour: compute the difference to credit to the equity of the owners of the parent.
• Does the standard say how to split goodwill, accumulated other comprehensive income and transaction costs? Which policy does the group adopt?
• Record the purchase from third parties.
• Record the partial sale without loss of control.

• MemoGroup profile and case conventionsOpen
• ContractSorvet SA: purchase from third partiesOpen
• ContractDelcour SA: partial sale without loss of controlOpen
• MemoBrannel brand auditOpen