Skip to content
Sign inRegister

Ask the Tutor ACCA FA

Share capital

SSano10y ago
Hello John, P buys 80% of S. P share capital is 3000 $ S share capital is 1000 $ Why in the consolidated financial statement we do not add the 80% of S's share capital, thus adding up to 3800$? P has 3000 $ in share capital but also 80% of S. Therefore, the consolidated company should have share for 3800$, because when we buy part of company we do that through buying shares. I know it is wrong, but I don't understand why. Thank you very much in advance!
John MoffatJohn MoffatTutor10y ago#1
The consolidated statements are prepared as though it is one big company. The people who control the 'big company' are the shareholders of P (they own P and P controls S). You should watch our free lectures which go through all the rules and the logic behind them.
John MoffatJohn MoffatTutor10y ago#3
No - it would not then be a bonus issue :-) (And it would be a rather strange thing to want to do anyway :-) )
John MoffatJohn MoffatTutor10y ago#5
You are welcome :-)
Sign into reply to this topic.