What reflects the treatment when a group disposes of a subsidiary in terms of retained earnings?

When a group disposes of a subsidiary, the treatment of retained earnings in relation to the non-controlling interest (NCI) can be quite nuanced. The correct choice indicates that a deduction is made for total comprehensive income attributed to NCI.

This approach aligns with the principles outlined in accounting standards such as IFRS. When a subsidiary is disposed of, any accumulated comprehensive income that has been attributed to the NCI must be recognized and appropriately adjusted in the calculations. This ensures that the NCI's share of the subsidiary's profits and losses is accounted for properly, reflecting their stake in the financial position of the subsidiary up to the point of disposal.

Thus, upon disposal, the retained earnings reported will have deducted the total comprehensive income that is attributable to the NCI, reflecting a more accurate representation of the parent company's financials post-disposal. This treatment ensures that both the parent and non-controlling interests are treated equitably in financial reporting, capturing their respective interests in the subsidiary until the point of sale.

On the other hand, retaining past retained earnings as unchanged ignores the NCI's share of income, while only accounting for the profits from the disposal doesn't incorporate the broader implications of past comprehensive income. Similarly, transferring all past retained earnings