Question
Konin Corporation (KC) owns an 85% interest in Donna Corporation (DC). On January 1, 2020, KC decided to sell a 50% interest in DC to
Konin Corporation (KC) owns an 85% interest in Donna Corporation (DC). On January 1, 2020, KC decided to sell a 50% interest in DC to a third party in exchange for cash of TZS 600,000,000/=. At the disposal date the total fair value of DC amounts to TZS 1,000,000,000/=. Furthermore in KCs consolidated financial statements the carrying value of DCs net assets is TZS 1,000,000,000/= and the carrying value of the non-controlling interest in DC (including the non-controlling interests share of accumulated other comprehensive income) is TZS 100,000,000/=. As a result of this transaction, KC loses control of DC but retains a 35% interest in the former subsidiary, valued at TZS 350,000,000/= on that date. Required: Calculate the gain or loss on the disposal of 50% interest in DC
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