2 Misson, a public limited company, has carried out transactions denominated in foreign currency during the financial

year ended 31 October 2006 and has conducted foreign operations through a foreign entity. Its functional and

presentation currency is the dollar. A summary of the foreign currency activities is set out below:(a) Misson has a 100% owned foreign subsidiary, Chong, which was formed on 1 November 2004 with a share

capital of 100 million euros which has been taken as the cost of the investment. The total shareholders’ equity

of the subsidiary as at 31 October 2005 and 31 October 2006 was 140 million euros and 160 million euros

respectively. Chong has not paid any dividends to Misson and has no other reserves than retained earnings in its

financial statements. The subsidiary was sold on 31 October 2006 for 195 million euros.

Misson would like to know how to treat the sale of the subsidiary in the parent and group accounts for the year

ended 31 October 2006. (8 marks)

Required:

D．iscuss the accounting treatment of the above transactions in accordance with the advice required by the

directors.(Candidates should show detailed workings as well as a discussion of the accounting treatment used.)

[试题]2 Marrgrett, a public limited company, is currently planning to acquire and sell interests in other entities and has askedfor advice on the impact of IFRS3 (Revised) ‘Business Combinations’ and IAS27 (Revised) ‘Consolidated and SeparateF．inancial Stat

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