Ownership and NCI · Track 4 · Tutorial 2 of 3

Handle losses, foreign associates and selling part of an associate

Three things change how an associate’s figures reach the group: losses that would take the investment below zero, a company that reports in another currency, and a sale of part of the stake. BrizoConsol handles the first two by itself. For a sale it posts the proceeds, and you post the gain or loss.

You will needAn associate recorded and posting, as in Account for associates and joint ventures. For a foreign associate, closing and average rates for its currency for every month.

By the endCompany J’s losses held at its investment, Company K’s translation difference posted to the CTA reserve, and a sale of part of Company G with its gain recorded.

1Follow an associate that makes losses

Your Group holds 25% of Company J, bought in January 2026 for 50,000. Company J then loses money. The group’s share of a loss reduces the investment, but the investment can’t go below zero through losses: once it reaches zero, further losses aren’t recognised. Later profits first make up the losses that weren’t recognised, and only then post.

Losses stop at zero (1); later profits make them up first (2).

Month	Group’s share	Posted	Not recognised	Investment
January	Cost	50,000	—	50,000
March	(30,000)	(30,000)	—	20,000
April	(35,000)	(20,000)	15,000	0
May	10,000	0	5,000	0
June	12,000	7,000	0	7,000

The limit is measured against the investment’s carrying amount: its cost plus every equity-method entry so far. The JV / Associate Report shows the full 25% of Company J’s result, before the limit. What is posted is in the month’s Auto JV equity method entry on Ownership & Equity → JV / Associate: in April its share of profit line is (20,000), not (35,000).

If the group has loans to Company J that are in substance part of its investment, or has to fund its losses, the standards extend the losses to those too. BrizoConsol stops at the investment, so post any further share as a journal of type JV / Associate, as in step 6.

2Set up a foreign associate

Your Group also holds 40% of Company K, which reports in MYR. Record its stake as for any associate, with the cost in the group currency, SGD. Then make sure Settings → Global Settings → Exchange Rates has, for MYR, a closing and an average rate for every month from the purchase.

Entry	Rate
Share of profit	Each month’s average rate.
Dividends	Each month’s average rate.
Share of OCI	Each month’s closing rate.
Translation difference	This month’s closing rate against last month’s.

3Read the translation difference

Company K’s investment stands for a share of net assets in MYR, so its value in SGD moves with the rate. Each month, BrizoConsol retranslates it: the opening carrying amount times this month’s closing rate divided by last month’s, less one, plus the month’s share of profit less dividends times the closing rate divided by the average rate, less one. The difference goes to the group’s CTA reserve, not to the share of profit.

At the end of August, the investment is carried at 200,000. One MYR is worth 0.3000 SGD at August’s closing rate and 0.3060 SGD at September’s (3.3333 and 3.2680 MYR per 1 SGD on Exchange Rates). 200,000 × (0.3060 ÷ 0.3000 − 1) = 4,000.

Open Ownership & Equity → JV / Associate for Sep-2026, and open Company K’s Auto JV equity method Sep 2026 (Company K).

Check

A line Auto JV translation difference debits the investment and credits the CTA reserve with 4,000. If the rate had fallen, the entry would run the other way.

Both closing rates have to be entered. If either month’s rate is missing, BrizoConsol posts no translation difference for the month rather than one worked out from a rate the group never had, so a missing difference usually means a missing rate.

4Record a sale of part of the stake

In December 2026, Your Group sells 10% of Company G — a third of its 30% — for 120,000. It keeps 20%, and still has significant influence.

Beside Company G’s Share purchases and sales, click + Record, then Sold shares.
Keep Your Group and JV / Associate, and choose Dec-2026 and 10.
Enter the Disposal amount, 120,000, and click Add Record.

A JV / Associate disposal uses only the date, the percentage and the amount. The new record reads Sold 10%, with 30% → 20%, and from December the share of profit is 20%.

5Know what BrizoConsol posts for the sale

BrizoConsol posts Auto JV investment disposed (Company G) in December: Dr the account that carries Company G in Your Group’s books / Cr the investment, with the 120,000 received. It takes the proceeds out of the investment, so the investment is left at its carrying amount less 120,000.

The gain or loss isn’t posted for you. Just before the sale, the investment is carried at 330,000, so the third sold is carried at 110,000:

Proceeds	120,000
Carrying amount of the third sold	110,000
Gain	10,000
Investment after the proceeds	330,000 − 120,000 = 210,000; it should be 220,000

6Post the gain by journal

Open Adjustments → Consolidation Journals, and click + Add a new journal entry.
Choose JV / Associate as the Journal Type, and Company G · JV / Associate as Related company.
Date it in December 2026. Debit 1700 Investment in Associates 10,000 and credit a gain on disposal account in profit and loss 10,000, and click Confirm.

The investment is then 220,000: two thirds of what it was. If Company G’s share of OCI includes amounts that your standard requires to be reclassified to profit and loss on a disposal, post the third that relates to the sale in the same journal.

Check

On Reports → Balance Sheet for Dec-2026, 1700 shows the 220,000 plus December’s own equity-method entries for the remaining 20%. The gain account shows 10,000 on the profit and loss.

7If something goes wrong

What you see	What to do
The posted share of profit is smaller than the JV / Associate Report shows	The report shows the share before the loss limit. Earlier losses that took the investment to zero are being made up first, as in step 1.
No translation difference for a foreign associate	A closing rate is missing, for the month or the month before. Add it in Settings → Global Settings → Exchange Rates.
The investment drops by the full proceeds	That is what the disposal entry does. Post the gain or loss as in step 6.
CTA, NCI, and JV journals require a related subsidiary selection.	Choose Company G as Related company on the journal.
The share of profit is still 30% after the sale	The Sold record’s month is wrong, or it was set to Subsidiary. Edit it.

Want more detail? See the documentation

JV / Associate JV / Associate Report Consolidation Journals

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