Working out the group structure of parent and subsydiary

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February 7, 2016 at 6:43 pm #299632
Mandip
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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
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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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