loan consideration in cons. FS

If loan is given as conisderation, it ll be included in all relevant calculations like goodwill.
loan is not included only when its not the part of consideration, then its more like inter co transaction. (in one of the questions P took over S’s 50% loan) but that wasnot as a part of consideration. p did that AFTER acquisition. in tht case its not part of consideration and inter co transaction

now apply this rule to all the questions where there is loan, and u ll see it fits every where

case one : if p going to acquire s these are included by the following typs

1- cash payment
2- share exchange means p gives its own shares at market price to shareholders of sub
3- deferred cash means p going to pay that cash after period of time say two years time (this should be adjusted to present value(be mindful that you have to unwind the discount means calculating the interest to be added to original amount at the end of the year and it will affect as well as on group retained earning )
4- contingent consideration
5 loan theses mean that p issue loan to sub against their investment
double entry in p records is as follow:

Dr. investment
CR. LOAN

BUT if p acquired 50% or 100% of sub loan that means that p paid to the lender of sub the amount of loan ie now p became the new lender to sub
assume that sub has 2000 loan in its records and p acquired 100% of that loan

double entry
P RECORDS

DR . INVESTMENT (LOAN GIVEN TO SUB)
CR CASH

SUB RECORDS

NO CHANGING OCCUR IN SUB SINCE SUB SHOULD PAY 2000 AS IT WAS BUT THE DIFFERENCE HERE THAT SUB SHOULD PAY 2000 TO PARENT NOT TO OLD LENDER WHO HAS RECEIVED HIS MONEY FROM PARENT

so take care that if the loan acquired so it consider from p to sub and that amount should eliminate while consolidation

if loan issued by p to sub so it should be including cost of investment (consideration ) while calculating goodwill

hopefully it helps
thanks,