Secondary Market Sale (Partial Project Divestment)
Recording the sale of a partial equity stake in a mature infrastructure project to an institutional investor (e.g., a Pension Fund).
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cash (Proceeds from Sale) | Asset (+) | 45,000,000.00 | - |
| Investment in Infrastructure SPV (Equity Method) | Asset (-) | - | 30,000,000.00 |
| Gain on Sale of Project Equity | Revenue (+) | - | 15,000,000.00 |
💡 Accountant's Note
Infrastructure developers typically 'recycle capital' by building a project and then selling a stake once it is operational and 'de-risked.' Under ASC 810/ASC 323, the developer de-recognizes the portion of the book value sold and recognizes a gain. If they retain a minority stake, they continue to account for the remainder under the equity method.
Practitioner & Systems Framework
💻 ERP Architecture
This is a 'Corporate level' entry. The Project SPV’s books do not change; only the Parent company’s investment ledger is updated.
⚠️ Audit Flags
Valuation of the retained stake. Auditors will check if a 'Step-up' gain was recorded on the portion *not* sold, which is only allowed under specific 'change of control' circumstances.
📄 Required Documentation
Share Purchase Agreement (SPA), funds flow statement, and a memo on the 'Loss of Control' vs. 'Significant Influence' assessment.
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Expert Analysis by Qusai Ahmad
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