Reference no: EM133115704

Question - On January 1, 2018, Parent acquired 30,000 out of 100,000 outstanding ordinary shares of Sub for P90,000 or 30% interest. For the six months ended June 30, 2018, Sub reported net income of P40,000. On July 1, 2018, Parent acquired additional 60,000 ordinary shares of Sub or 60% interest at a price of P4 per share or total cost of P240,000. Parent paid P20,000 acquisition related costs and P10,000 indirect costs of business combination. The acquisition piece per share of the additional shares clearly reflected the fair value of the existing interest of Parent in Sub. It is the policy of Parent to initially measure the non-controlling interest proportionate in net assets of the acquiree at fair value. The fair value of the non-controlling interest in net assets of the acquiree is reliably measured at P50,000. At the acquisition date, the net assets of Sub were reported at P400,000. An asset of Sub was overvalued by P50,000 while one liability was overvalued by P30,000. What is the gain on remeasurement of the existing Investment in Entity Sub as a result of step acquisition?