Question
On January 1, 2020 Green Co, a company that adopts IFRS, acquired a 40% interest in Yellow Co for BD300,000. At the date of acquisition,
On January 1, 2020 Green Co, a company that adopts IFRS, acquired a 40% interest in Yellow Co for BD300,000. At the date of acquisition, Yellow Cos net assets had a carrying value of BD550,000 and a fair value of BD600,000. The difference between the carrying value and the fair value is attributable to equipment being depreciated over ten years. Green Co has been evidently represented on Yellow Cos board of directors and have actively participated in the companys policy-making process. During 2020, Yellow Co had a net income of BD90,000 and paid a BD40,000 dividend.
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