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CD Ltd. holds 50% of RS Ltd. (JV) — carrying amount ₹1,00,000. CD sells a 20% stake for ₹80,000 cash; FV of retained 30% is ₹1,20,000; CD loses joint control. Gain/loss in P&L on discontinuation?
AGain of ₹20,000
BLoss of ₹20,000
CGain of ₹1,00,000 (= 80,000 cash + 1,20,000 FV retained − 1,00,000 carrying value)
DNo gain/loss because equity method continues
Answer & Solution
Correct answer: C. Gain of ₹1,00,000 (= 80,000 cash + 1,20,000 FV retained − 1,00,000 carrying value)
Ind AS 28 paragraph 22: gain = (proceeds 80,000 + FV of retained interest 1,20,000) − carrying amount 1,00,000 = ₹1,00,000. The retained interest is measured at FV and accounted under Ind AS 109 going forward.
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