Construction Groups · Track 2 · Tutorial 2 of 2
Take control of a project company you part-own
When a contractor buys out its joint venture partner, the project company stops being one investment line. The stake already held is remeasured to fair value, and the company is consolidated from the month of control.
1Know what changes when you take control
Your Group and another contractor have each held 50% of Harbour Link Project Co since January 2026, as a joint venture (see Account for a construction joint venture). On 1 January 2027 the partner leaves the project, and Your Group buys its 30% for 1,500,000. Your Group now holds 80% and controls the company. The other 20% stays with a minority shareholder.
| Until December 2026 | Harbour Link Project Co is a joint venture. BrizoConsol posts Your Group’s 50% of its profit by the equity method, and the group carries it as one line, Associate/JV - investment: here 2,400,000, its 2,000,000 cost plus its share of profit. |
|---|---|
| On 1 January 2027 | Gaining control is a business combination (IFRS 3.42). The 50% already held is treated as if sold and bought back at its fair value, 2,500,000. The 100,000 difference to its carrying amount is a gain in profit and loss. |
| From January 2027 | Harbour Link Project Co is consolidated line by line, with 20% NCI. Goodwill is measured once, from the price for the 30%, the fair value of the 50%, and the NCI. |
2Gather the figures
| Price for the 30% | 1,500,000, paid by Your Group and recorded in its own books. |
|---|---|
| Net assets at fair value | The whole project company’s identifiable assets and liabilities on 1 January 2027, from the purchase price allocation: 4,800,000. For a contractor this is where the contracts in progress, retentions and claims are valued, not taken from its books. |
| Fair value of the 50% already held | 2,500,000, usually from the same valuation as the price. |
| Carrying amount of the 50% | Associate/JV - investment at 31 December 2026: 2,400,000. You don’t enter it: BrizoConsol takes it from the equity-method entries it posted. |
3Choose the accounts
- Open Ownership & Equity → Ownership, and open Posting accounts with the gear beside Group structure.
- Choose a profit and loss account for Gain/loss remeasuring the stake already held, and check FV Adjustment is chosen. Click Save.
- After you record the purchase in step 4, click Harbour Link Project Co, open Totals and accounts for this company, choose Investment in subsidiary - Harbour Link Project Co and Goodwill - Harbour Link Project Co, and click Save.
The remeasurement gain is posted to the first account. Until it is chosen, Still to choose lists it as Harbour Link Project Co: the purchase in Jan 2027 gained control over a stake already held.
4Record the purchase that gives control
- Beside Harbour Link Project Co’s Share purchases and sales, click + Record, then Bought shares.
- Choose Your Group, Jan-2027 and 30, and choose Subsidiary.
- Enter the Investment cost (group currency), 1,500,000, and the Net assets at date (fair value), 4,800,000.
- The dialog now says the group already held 50% without control. Enter the Previously held interest fair value, 2,500,000.
- Keep NCI measurement as Share of net assets (partial goodwill), and click Add Record.
The dialog doesn’t ask for the 50%’s carrying amount or account. BrizoConsol has posted it by the equity method, so it takes the balance on Associate/JV - investment at the day before the purchase, 2,400,000, and clears that account at fair value. The equity method stops from the record’s date.
5Check the result
There is nothing to post: saving the record recalculates the group and posts the entries.
| Ownership | Harbour Link Project Co shows Subsidiary, NCI % of 20%, and no amber dot. Under Totals and accounts for this company, Acquisition goodwill is 160,000.00. |
|---|---|
| Profit & Loss, Jan-2027 | The 100,000 gain is on the remeasurement account, and from January the project’s revenue and contract costs are in the group line by line. There is no share of profit line for it from January. |
| Balance Sheet, Jan-2027 | Associate/JV - investment no longer holds the 50%; Harbour Link Project Co’s assets and liabilities, goodwill of 160,000 and NCI of 960,000 are in. |
| NCI Report | Harbour Link Project Co’s row, with the acquisition entry under How each figure was worked out. |
Check
For December 2026 and earlier, Harbour Link Project Co is still shown as one investment line and a share of profit: the comparatives aren’t restated.
6If something goes wrong
| What you see | What to do |
|---|---|
| The dialog doesn’t ask about the stake already held | The January 2026 record isn’t set to JV / Associate. Edit it. |
| Previously held interest fair value is required when an acquisition establishes control over a stake already held. | Enter the fair value of the 50% at 1 January 2027. |
| Net assets at date (fair value) is required for the acquisition that establishes control. | Enter the whole company’s net assets at fair value, 4,800,000. |
| The dialog asks for the carrying amount and account of the stake already held | No equity-method entries were posted for the 50% before January 2027. Check Associate/JV - investment is chosen in Posting accounts and the joint venture’s months are loaded, so the equity method posts first. |
| The remeasurement gain looks wrong | Check the fair value of the 50%, and the balance on Associate/JV - investment on the Balance Sheet for Dec-2026. The gain is the difference. |
| Harbour Link Project Co has an amber dot | Open it to see what it Needs: usually the remeasurement account or Goodwill. |
Want more detail? See the documentation