Kochin Corporation (KC) owns an 85% stake in Doha Corporation (DC). On January 1, 20XX, KC decided to sell the 50% interest in DC to a third party in exchange for € cash 600,000. On the disposal date, DC's fair value amounted to € 1,000,000. Furthermore, in the report In KC's consolidated financial statements, the carrying amount of DC's net assets is € 1,000,000 and the carrying amount of the interest non-controlling interest in DC (including non-controlling interest's share of accumulated income another comprehensive) is € 100,000. As a result of this transaction, KC lost control of DC however retains 35% interest in the previous subsidiary, amounting to € 350,000 as of that date. Instructions: 1. Discuss and determine the accounting treatment for recording the transaction accordingly with IFRS 10 (PSAK 65) 2.Calculate how much profit or loss from the transaction (if any) 3. Discuss and determine how the accounting treatment would have been different if it assumed that KC didn't lose control after the transaction.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Kochin Corporation (KC) owns an 85% stake in Doha Corporation (DC). On January 1, 20XX, KC decided to sell the 50% interest in DC to a third party in exchange for € cash 600,000. On the disposal date, DC's fair value amounted to € 1,000,000. Furthermore, in the report In KC's consolidated financial statements, the carrying amount of DC's net assets is € 1,000,000 and the carrying amount of the interest non-controlling interest in DC (including non-controlling interest's share of accumulated income another comprehensive) is € 100,000. As a result of this transaction, KC lost control of DC however retains 35% interest in the previous subsidiary, amounting to € 350,000 as of that date. Instructions: 1. Discuss and determine the accounting treatment for recording the transaction accordingly with IFRS 10 (PSAK 65) 2.Calculate how much profit or loss from the transaction (if any) 3. Discuss and determine how the accounting treatment would have been different if it assumed that KC didn't lose control after the transaction.

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