When an acquiree disposes of a business, the gain or loss is recognised in:
A) retained earnings
B) revaluation surplus
C) the statement of profit or loss and other comprehensive income
D) capital profits

Question

Quizplus · Accepted Answer

The gain or loss resulting from the disposal of a business by an acquiree is recognized in the statement of profit or loss and other comprehensive income, as per IFRS 3 (Business Combinations). Retained earnings and revaluation surplus are not appropriate because they do not reflect the specific impact of the disposal. Capital profits are not a recognized financial statement item.

When an Acquiree Disposes of a Business, the Gain or Loss