INVESTMENT ASSOCIATE

PROBLEM NO. 23 in VID

ANSWER:

COST 360,000.00
SOPA- 2019 45,000.00 (150k x 30%)
Less: Dividends - 2019 (27,000.00)
CA 12/31/19 378,000.00
SOPA up to 7/1/2020 27,000.00 (180K x 6/12 x 30%)
Less: Dividends 4/1/2020 (18,000.00) (60K x 30%)
CA as of 7/1/2020 387,000.00

Therefore:

Sales Proceeds 237,000.00

Less: CA of
Investment Sold 193,500.00

Gain on Sale of
Investment 43,500.00

PROB NO. 24

*Since the other half is sold at FV:

FV 237,000.00
Less: CA of Investment sold (193,500.00)
FV adjustment 43,500.00
J.E ON PROB NO. 24 - NEW RECLASSIFICATION (FVTOCI)

Equity Investment - FVTOCI 237,000.00

Equity Investment - Associate 193,500.00
FV Adjustment Gain (P&L) 43,500.00
#

QUESTION: WHY P/L?

ANSWER: Entry above is based on PAS 28

PROB NO. 25

ANSWER:

Gain on Sale of
Investment 43,500.00
FV Adjustment Gain (P&L) 43,500.00
SOPA up to 7/1/2020 27,000.00
Dividends received (10/1/2020) 9,000.00 (60,000 * 15%)
TOTAL 123,000.00
PROB NO.26 : INVESTMENT IN ASSOCIATE HELD FOR SALE

ANSWER:
SO: x 1/2

CA as of 12/31/2019 378,000.00 189,000.00

FV -CTS 390,000.00 195,000.00

*APPLY PFRS 5 WHILE THE MEASUREMENT IS WHICHEVER IS LOWER*

Therefore:

Held for Sale 189,000.00

Retained before disposal 189,000.00 (378k x 1/2)

WHAT IF WALA NAHALIN WITHIN 1 YEAR (FROM THE DATE OF CLASSIFICATION)?

If Disqualified: APPLY EQUITY METHOD RETROSPECTIVELY (AS IF NEVER HELD FOR SALE)
CA = EQUITY METHOD AT THE TIME OF CLASSIFICATION AS HELD FOR SALE
HELD FOR SALE)