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- This topic has 5 replies, 3 voices, and was last updated 9 years ago by
John Moffat.
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- February 18, 2016 at 9:28 pm #301090
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 #301110The 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 #304313Sir, 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 #304336No – 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 #304353Thanks 🙂
March 8, 2016 at 2:44 pm #304387You are welcome 🙂
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