UK Acquisition Accounting Treatmant
Hi All
I'm due to join a company that has just been acquired through a management buy out and am required to post the necessary treatment of the new structure but I am unsure of the specifics. The situation is as follows:
Details prior to take over:
The company had less than 10 shareholders that all had outstanding loans that were to be repaid back by the company
A share capital and share premium account
The company was/is running at a loss which is reflected in the P&L reserve
Details post takeover:
A single shareholder has purchased the shares of the other shareholders at an agreed premium
The purchase has been funded by an external loan
A new holdings company is to be created, that owns 100% of the trading company
As I have never been involved in an acquisition before I would really appreciate some advice on how I treat the above, I'm unsure of the technical treatment of this acquisition/MBO, including goodwill calculations, reserve accounts to create/use for both the existing and the new holdings company, accounting standard to adhere to etc
Any advice is most greatly welcomed!!
Thanks in advance
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