Book keeping for investments in subsidiaries
My client formed 'newco' which then purchased the share capital of 2 trading companies. The trading activities of the smaller subsidiary were transferred to the larger subsidiary and this smaller subsidiary is now dormant. The ongoing trading activities have not been 'hived up' to the holding company.
Both trading companies voted dividends to their new parent and in the case of the smaller company, the dividend reduced the reserves to £nil.
I am now preparing the holding company's accounts and would welcome opinions on the correct book keeping.
1. The cost of the acquisitions is shown as investments in the balance sheet.
2. The dividends received are shown as income in the p/l (cash helped to pay for shares)
3. Can the cost of the investments be reduced by the amount of the dividend received and this be disclosed as 'amounts written off investments in the p/l?
I could be over complicating the matter?
- Working out a daily rate 273 7
- Company overdue but wants to be struck off 588 20
- Professional Clearance 39 1
- Limited Company - Personal Bank Account 3,019 66
- are receipts needed? 317 11
- New accountant 418 8
- do i pay vat when buying a business 70 2
- ideas for a bonus scheme for accountants 580 9
- Loss Relief 130 2
- Tax case reference request 204 3
- How to? 137 1
- Cheque alternative - letter to HMRC re undeclared income 164 1
- Santander Scrip Dividend Scheme 183 2
- Amending prior year accounts for the first time? 1,414 25
- Unusual Self Employment Expense Claims? 503 6
- Sage Instant cash based flat rate 116 2
- Loan notes payment of principal and interest 111 2
- HMRC VAT misstatement disclosure 221 2
- How to account fot Cross-border vat. 229 5
- Paint Manufacturer Flat Rate Scheme 479 27
- Skandia using wrong address 1,589
- Nil Rate Band Trust - index linked debt by way of charge over property 885
- International interest certificate 494
- NOVA 349
- Can Limited Company Buy Share of Rental Property? 273
- Have we escaped Gift with Reservation of Benfit & Pre-owned asset charges? - Gift after benefit 254
- Management expenses for investment company 243
- Bonus Bonds 240
- Help with tax codes on Sage 186
- Capital reduction 172