Solution-How Ochi Limited should be treated in consolidated

How Ochi Limited should be treated in consolidated accounts

Reference no: EM133037047

Question - Portland Limited bought 30% of the Ordinary shares in Ochi Limited on 1 April 2019 at a price of $4.90 per share. The share capital of Ochi Limited was $24,000,000 in ordinary shares of $4 each.

For the year ended 31 December 2018 Ochi Limited made a net profit of $1,600,000. You may assume that profit accrued evenly throughout the year. At year end the directors of Portland Limited determined that the investment in Ochi Limited was impaired by 20 % of its initial cost.

Required -

(1) Explain how Ochi Limited should be treated in the consolidated accounts?

(2) Using the equity method of accounting calculate, the value at which Ochi Limited should be reported in the consolidated statement of financial position, for the Portland Limited Group.

Reference no: EM133037047

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How Ochi Limited should be treated in consolidated accounts

Reference no: EM133037047

Reference no: EM133037047

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