Discussion forum_Unit1

Thank you very much Seth Munyarukundo for your good and interesting question. The answer is YES. As you learnt in Piecemeal dissolution (in Advanced aspects of Partnership firms accounts), piecemeal means achieving something in stages. In group accounts, we use this term to mean the cases where a parent company gains control over an investee company (subsidiary or sub-subsidiary) by acquiring its ordinary shares in different times (stages, pieces). For example, Monday Ltd acquired 28% of equity shares in Miss Ltd on 31 October 2015. Due to good financial performance of this investment, Monday Ltd decided to buy another 20% equity shares of Miss Ltd on 20th July 2018. Later, on 15th January 2020, Monday Ltd acquired additional 17% of Miss Ltd's ordinary shares. To account 48% in 2018, we need to take into consideration the purchase consideration of 20% plus fair value of existing 28% and recognise a gain or loss on this 28% (compare FV on re-measurement and carrying value of existing 28%) and continue to report Miss Ltd as an associate. However, from January 2020 onward, Miss Ltd will be accounted for as a subsidiary we need to calculate goodwill and thereafter consolidate line by line all assets and liabilities of Monday Ltd plus Miss Ltd and showing the portion belonging to the Non-controlling interest in Miss Ltd in the equity section below Shareholders funds (equity of the parent).