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