Loss of Control in Consolidation | Entire Stake Sale Explained | Ind AS 110 | CA Final FR

Loss of Control – Entire Stake Sale Basic Idea No Control = No Subsidiary = No Consolidation If parent sells its entire stake in a subsidiary: Control ends Subsidiary relationship ends That subsidiary is no longer consolidated Situation Parent sells entire holding: 100% → sold fully or 70% → sold fully This is called: Entire Disposal of Subsidiary What Happens in Consolidated FS? 1. Sale Consideration Comes In Stake sale → Cash/Bank increases Example: Sale proceeds = ₹100 crore 2. Remove Net Assets Subsidiary’s net assets were part of consolidated balance sheet. Now subsidiary is sold → remove them. Example: Net assets = ₹50 crore 3. Remove Goodwill Related goodwill must also be eliminated. Example: Goodwill = ₹10 crore Profit on Sale Total carrying amount removed: 50+10=60 Sale proceeds: 100−60=40 Profit = ₹40 crore Transfer this profit to: Consolidated P&L Important Distinction Case 1 – Parent had 100% No NCI existed Case 2 – Parent had less than 100% NCI existed Treatment slightly changes #CAFinal #CAInter #IndAS #IFRS #Consolidation #GroupAccounts #FinancialReporting #LossOfControl #Subsidiary #NCI #Goodwill #ConsolidatedFS #Accounts #AdvancedAccounts #CAStudents #CAClasses #CommerceStudents #AccountingConcepts #StudyCA #AuditAndAccounts #FinanceEducation #CAFaculty #AccountingMadeEasy #ExamPreparation #CAFinalFR #CorporateAccounting #LearnAccounting #CAIndia #ConceptClarity #FRClasses