Partial disposal and other comprehensive income

Learning objectives

• Calculate the proportion of other comprehensive income reclassified to profit or loss on a partial disposal in which significant influence is retained.L3, L4

Normative references

• IAS 28 §25If the ownership interest in an associate or a joint venture is reduced but the investment continues to be an associate or a joint venture, the entity reclassifies to profit or loss the proportion of the gain or loss previously recognised in other comprehensive income relating to that reduction, if that gain or loss would be required to be reclassified to profit or loss on the disposal of the related assets or liabilities.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

2 questions

• Alba SA sells part of its interest in Brise SA, an associate, and retains significant influence. The sale represents {reduction_proportion} of its previous interest (case data). The accumulated other comprehensive income recognised in respect of Brise amounts to {accumulated_oci} (gain). Calculate the amount reclassified to profit or loss.L3
• Alba SA sells half of its interest in Brise SA, an associate, and retains significant influence: the reduction represents {reduction_proportion} of the previous interest. The accumulated other comprehensive income recognised in respect of Brise is {accumulated_oci} (gain). Case convention: the reclassified gain is credited to a gain-on-disposal account. Record the reclassification entry.L4