Problem
Fortnum (which prepares its financial statements using IFRS) acquired 60% of the equity interests of Lighthouse, a public limited company, on 30 April 2020 for cash of $70 million. Lighthouse's identifiable net assets had a fair value of $86 million and the non-controlling interest (NCI) had a fair value of $28 million at the date of acquisition. On 1 November 2021, Fortnum disposed of a 40% equity interest in Lighthouse for a cash consideration of $50 million. Lighthouse's identifiable net assets were $90 million and the carrying amount of the NCI was $34 million at the date of disposal. The remaining equity interest had a fair value of $40 million at the date of disposal. After the disposal, Fortnum exerts significant influence over Lighthouse. Any increase in net assets since acquisition has been recognised in profit or loss and the carrying amount of the investment in Lighthouse has not changed since acquisition. Goodwill has not been impaired. No entries have been made in the financial statements of Fortnum in respect of this transaction, other than to record the cash received.
Task
Discuss, with suitable workings, how the disposal of Lighthouse and the resulting gain should have been treated in Fortnum's consolidated financial statements. Assume the financial year end is 30 April.