Cost of investment in subsidiary write back

Cost of investment in subsidiary write back

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We have a holding company with negative reserves because several years ago the cost of investment in a subsidiary company was written off (the company was loss making and had negative reserves).

The subsidiary company is now trading profitable and has build up a reasonable amount of equity.

So my question is whether the cost of the investment in the holding company can now be written back up? If so, this would created new P&L reserves, so would these be distributable?

Thanks

Replies (3)

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By johngroganjga
16th Sep 2016 14:03

Yes and yes - but only up to the original cost figure.

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By robbie2016
26th Oct 2016 10:00

Thanks - that makes sense. Could you possibly point me to the section in FRS 102 where it actually confirm that is the case?

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Replying to robbie2016:
By Ruddles
26th Oct 2016 10:15

9.26 (which indicates that you can actually account for the subsidiary at fair value - if you want to)

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