Share this content

Business combinations

Dealing with share capital and reserves on acquisition

Didn't find your answer?

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?

Replies (1)

Please login or register to join the discussion.

Hallerud at Easter
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-

Thanks (1)
Share this content