I was wondering if anyone can help with regards the accountancy treatment for a minority share buyout. Does the issued share capital decrease and the balance go to a redempttion reserve? Help!
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Assuming this is Company Purchase of Own Shares
The payment for shares obviously leaves the bank and is debited to distributable reserves. There is also a debit entry to share capital for the nominal value of the shares purchased with the other side of that entry being to the capital redemption reserve.
Eh?
You seem to now be saying that Companies B and C purchased shares in Company A from another minoirty shareholder in which case the payment for the shares does not enter Company A's books at all. Companies B and C would show a fixed asset investment in their respective balance sheets.