I have a parent company (Company A) that owns 80% of a subsidiary (Company B).
During the year, company B issued £3.5m of share capital; this was taken up 85% by company A and 15% by the NCI. Net assets at the date of issue were £750k.
In company A, I reflected the investment as Dr Investment, Cr Cash £2,975k. In the company B, Dr Cash, Cr Share capital £3.5m.
When I’m doing my consolidation, so far in my consolidation adjustments I have Dr Share Capital £3.5m, Dr NCI £37.5k (5% lost x 750k), Cr Investments £2,975k, Cr Co A reserves £37.5k.
1) is the above correct so far?
2) where does my balancing figure go in my consolidation adjustments and why?