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Business combinations

Dealing with share capital and reserves on acquisition

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If company A purchased 100% of company B, how would you deal with the aquisition accounting on the share cap and reserves side?

Share capital of B    £70

Capital redemption reserve £37

P&L reserves £37,166

 

Would these be represented in the entity acocunts of newly acquired company B and then reversed out at consolidation?

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Hallerud at Easter
By DJKL
10th Dec 2019 18:10

Presuming A is buying shares in B

In A's accounts

Dr Price paid for shares to Investment in sub
Cr Price paid to Bank

Consider impairment post purchase in A

In B no accounting entries

Upon consolidation consider what adjustments required within AB Group re underlying assets in B upon acquisition, as is normally the case upon consolidation.

Take a look at this thread-

https://www.accountingweb.co.uk/any-answers/acquisition-accountinggoodwill

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