H Ltd. purchased a 100% subsidiary S Ltd. for 500,000 at the end of March, 20X3, when the fair value of the S Ltd.'s net assets was - 400,000. H…

(ii) Computation of gain on the sale of 60% investment in Consolidated Financial Statements of H Ltd.'s for the year ended 31st March, 20X5 In the consolidated financial statements, the group will calculate the gain or loss on disposal differently. The carrying amounts of all of the assets, including goodwill and the full amount of any cumulative exchange differences and any FVOCI-reserve previously recognised in equity, are de-recognised. when control is lost. This is compared to the proceeds received and the fair value of the investment retained. The gain on disposal will be calculated as follows: ₹ Sale proceeds 6,75,000 Add: Fair value of 40% interest retained 4,50,000 11,25,000 Less: Net assets disposed, including goodwill (8,00,000 + 1,00,000) (9,00,000) Gain on sale in the group's financial statements 2,25,000 This gain on loss of control would be recorded in profit or loss. The gain or loss includes the gain of 1,35,000 (₹ 6,75,000 (₹ 9,00,000 x 60%)) on the portion sold. However, it also includes a gain on remeasurement of the 40% retained interest of 90,000 (₹ 4,50,000 -3,60,000). The entity will need to disclose the portion of the gain that is attributable to remeasuring any remaining interest to fair value that is 90,000).