Investment Held for Sale

• This is question number 32 about investment held for sale.

Acquisitions

• On January 1, 2017, "Company Shi" acquired 44% of the ordinary shares of "Company Ur" for 8,000 NIS in cash.
• Company Ur is a private company.
• The equity of Company Ur on January 1, 2017, totaled 10,000 NIS.
• The fair value of the identifiable assets and liabilities of Company Ur on the acquisition date matched their book value in Company Ur's records.

Sales

• On December 31, 2017, due to liquidity difficulties, Company Shi's board of directors convened to discuss options.
• The CEO of Company Shi recommended selling some shares of Company Ur to solve the company's liquidity issues without affecting its operating assets.
• Company Shi's board accepted the proposal and ordered the sale of 35% of the ordinary shares of Company Ur ("the shares held for sale") as soon as possible for fair value as determined by a certified appraiser appointed by the company.
• The company started looking for a potential buyer for these shares.
• It is to be assumed that the shares are available for sale in their current condition.
• Company Shi expects the sale to be completed within a year from the decision date.
• On July 1, 2018, the shares held for sale were sold for their fair value.

Net profit

• Company Ur's net profit each year is 16,000 NIS.
• The net profit is distributed evenly throughout the year.

Additional data

• Data provided by the appraiser appointed by the company:

Date*:

• December 31, 2017: Fair value of 100% of Company Ur shares: 21,000 NIS
• July 1, 2018: Fair value of 100% of Company Ur shares 35,000 NIS
• December 31, 2018: Fair value of 100% of Company Ur shares 50,000 NIS *At all the dates above:
• Sale costs constitute 5% of the sale price (the fair value).
• The value in use of Company Ur's shares equals the fair value less sale costs.
• If Company Shi loses significant influence in Company Ur, Company Shi classifies the investment in Company Ur's ordinary shares to the follow-up treatment group at fair value through other comprehensive income, according to IFRS 9 guidelines.
• The effect of tax should be ignored.
• The company's annual financial statements are published on March 31 of the following year.
• Present the impact of the company's investment in Company Ur on the company's statement of total profit for the year 2018.