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Working out the group structure of parent and subsydiary

Forums › ACCA Forums › ACCA FA Financial Accounting Forums › Working out the group structure of parent and subsydiary

  • This topic has 1 reply, 2 voices, and was last updated 10 years ago by John Moffat.
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  • Author
    Posts
  • February 7, 2016 at 6:43 pm #299632
    Mandip
    Member
    • Topics: 19
    • Replies: 15
    • ☆

    Hi

    I am working a question from the BPP Revision kit and i am struggling to work out the group structure between a parent company and its subsidiary. I need to work out what percentage the parent owns the subsidiary.

    In parents individual accounts in the balance sheet under investments i have:

    21,000,000 $1 ordinary shares in subsidiary at cost.

    The equity section in parent accounts is:
    $1 ordinary shares $100,000

    The equity section in subsidiary accounts is:
    $1 ordinary shares $30,000

    Fair value of the non-controlling interest at date of acquisition was $11,800

    Apparently the parent owns 70% of the subsidiary but i can not work how, please help?

    February 8, 2016 at 8:05 am #299674
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54831
    • ☆☆☆☆☆

    Without seeing the question, I would guess that the accounts are in $’000’s and that therefore the subsidiary has share capital of $30,000,000.

    Since they are $1 shares, the subsidiary has 30M shares in issue.
    If the parent owns 21M shares then they own 21/30 = 70% !

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