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Group reorganisation accounting

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Group reorganisation accounting

  • This topic has 1 reply, 2 voices, and was last updated 8 years ago by P2-D2.
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  • August 2, 2017 at 5:50 pm #400052
    abshaffy
    Member
    • Topics: 1
    • Replies: 0
    • ☆

    Current Group Structure: A Ltd a newly formed holding company. Trading companies are B Ltd, C Ltd, D Ltd and E Ltd. C Ltd, D Ltd and E Ltd are wholly subsidiaries of B Ltd and sit on the balance sheet of B Ltd at a cost of £3.7m.

    New Group Structure post share changes: A Ltd acquired the entire share capital of B Ltd, C Ltd, D Ltd and E Ltd via a share for share exchange. All 4 trading companies sit as individual companies under the holding company A Ltd.

    In the accounts of B Ltd – Post the group reconstruction I am unsure how to treat the subsidiary cost of £3.7m in B Ltd . Does the cost of £3.7m tranfer to the holding company A Ltd via a dividend in specie?

    August 6, 2017 at 4:49 pm #400760
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7217
    • ☆☆☆☆☆

    Hi,

    I’d recommend that you don’t spend any time on looking at reorganisations as it is far too time consuming and complex a subject. Focus your attention elsewhere.

    Thanks

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