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Share capital

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Share capital

  • This topic has 5 replies, 3 voices, and was last updated 9 years ago by John Moffat.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • February 18, 2016 at 9:28 pm #301090
    sano1987
    Participant
    • Topics: 32
    • Replies: 15
    • ☆

    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!

    February 19, 2016 at 6:58 am #301110
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    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.

    March 8, 2016 at 10:11 am #304313
    hemraj123
    Member
    • Topics: 110
    • Replies: 188
    • ☆☆☆

    Sir, I have a general question.

    Can a company issue bonus shares but ask the shareholders to partly pay for them?
    Suppose a company issues 1000 shares at par ($1) and then makes a bonus issue 1 for 5 but asks the share holders to pay $0.1 for those shares?

    Is this scenario possible?

    March 8, 2016 at 11:44 am #304336
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    No – it would not then be a bonus issue 🙂

    (And it would be a rather strange thing to want to do anyway 🙂 )

    March 8, 2016 at 12:00 pm #304353
    hemraj123
    Member
    • Topics: 110
    • Replies: 188
    • ☆☆☆

    Thanks 🙂

    March 8, 2016 at 2:44 pm #304387
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
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