Compute the gain or loss on the disposal of shares

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Chocolate Bhd holds 80% of the equity shares of Vanilla Bhd, which was acquired on 1 January 2012 for RM2.5 million. The partial goodwill on consolidation recognised was RM500,000. On 1 January 2014, Chocolate Bhd disposed of 25% of its shares in Vanilla Bhd for RM1 million and the fair value of the net assets of Vanilla Bhd on that date was RM4.5 million. The remaining shares had a fair value of RM4.0 million. As at 1 January 2014, goodwill on consolidation remains unimpaired.

Question 1: Compute the gain or loss on the disposal of shares for Chocolate Bhd's financial statements and for the group's consolidated financial statements.

Reference no: EM132531348

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