How to account for investment that holding more than 20% (associate or joint venture) then reduced to less than 20%

[TAN CHIN CHEONG]

Hi, I need anybody help here regarding above issue, thanks!
What journal entries I need to perform if a investment in associate (20-50%) been reduced to just an investment (<20%) .

 

[UKFCA_London]

hi, IAS 28 para 22 covers this, ie the entity measures the retained interest at fair value & recognises in profit or loss any difference between:

• the fair value of any retained interest and any proceeds from the disposing of the part interest in the associate; and
• the carrying amount of the investment at the date the equity method was discontinued.

So if the associate was previously on balance sheet at 30, you sold part of your interest for 20 & your new investment had a fair value of 6, looking at para 22 you would I think:
Dr Cash 20
Dr Investment 6
Dr P&L 4
Cr Investment in associate 30

 

[TAN CHIN CHEONG]

Thanks a lot @ UKFCA_London!