- This topic has 3 replies, 2 voices, and was last updated 7 years ago by
.
- Posts
Hello Everyone, hope someone can help for the below.
Scenario : Company A owns 70% B . Company B owns 100% C, Company C owns 100% D,E,F
Company C issues new share capital to be fully taken up by Company A.
Ultimate outcome is Company B owns 55% of C, Company A owns Direct 45% of C.(Total effective interest will be 83.5%)
There will be 2 equity adjustment here as C is still a subsidiary of B and A, before and after the new share capital.
1 for Company B and 1 for Company A,My question is, when we do equity adjustment for Company B, do we only consider the Net asset of Company C, or do we have to consider the consolidated financials of Company C? (Which considers C,D,E,F)?
Then for the case of Company A, do we use the “effective” ownership interest in determining the decrease of NCI? IE : Before it was 70% ownership in C via indirect ownership, now its 83.5%?
Hope my question is not too confusing lol
Thanks for your kind reply.
Maybe i should simplify my question, if let say u dispose a company with subsidiaries below which u are currently consolidating it via indirect interest, for your consolidation disposal adjustment, do you only use the 1 company’s financials or do you use the consolidated financials of the subsidiary u are disposing?
Hope you can help.This will solve lots of my questions already.
Thanks alot!
Hi,
Again, not going to be examined so no need to worry about it, plus I don’t fully understand what you are referring to in your question. What is the disposal adjustment? What do you mean by the last part of the question with regards the different financial statements?
The group accounts we use to account for the substance of the disposal, the individual accounts we use to account for the legal form of the disposal.
Thanks
- You must be logged in to reply to this topic.