Question
(b) Truly Berhad has a 100%-owned foreign subsidiary, which has a carrying value at a cost of RM25 million. It sells the subsidiary on 31
(b) Truly Berhad has a 100%-owned foreign subsidiary, which has a carrying value at a cost of RM25 million. It sells the subsidiary on 31 December 2019 for $45million. As at 31 December 2019, the credit balance on the exchange reserve, which relates to this subsidiary, was RM6 million. The functional currency of the entity is the Ringgit Malaysia and the exchange rate on 31 December 2019 is RM1 to $1.5. The net asset value of the subsidiary at the dateof disposal was RM28 million.
Required:
Explain the accounting treatment forthe disposal transaction. [4 marks]
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started