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How is the expense on acquisition of a subsidiary accounted for?And during consolidation how is this reflected?
In the parent’s own records we have, as appropriate:
Dr Investment in subsidiary
Cr Cash, share capital, share premium, long term debtOn consolidation … there is no record of the cost of acquisition!
The investment recorded by the parent is, on consolidation, replaced by the net assets of the acquired subsidiary + goodwill
OK?
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