Investment in a subsidiary non consolidated accoun


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Company A holds 100% of shares in company B.

Company A has the investment in B valued at £67,000.

However B has Capital reserves 2020 (£50,000) 2019(£41,916) 2018 £82,560

Profit Loss 2020 (£9,084) 2019 (£124,476) 2108 £6,650

The directors insist the valuation is reasonable. 

What is the correct method to value the subsidiary please ?




Replies (5)

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By thevaliant
24th Mar 2021 21:40

Looks to me like its impaired, but if the directors insist, as long as its not an audit, nowt you can do.

Valuing a business isn't something I do.

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By paul.benny
25th Mar 2021 07:15

Whether or not the accounts are being audited, the directors are still responsible for ensuring they show a true and fair view.

There's no immediate impact on tax from not booking an impairment.

As thevaliant says, if the directors won't budge, nothing you can do except disengage.

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Replying to paul.benny:
By atleastisoundknowledgable...
25th Mar 2021 08:00

paul.benny wrote:

...if the directors won't budge, nothing you can do except disengage.

Harsh. They might know something you don’t, like it’s about to be sold for £67k.

I wouldn’t be disengaging over this (tho TBF it takes a lot for me to do, really only for a low paying PITMFA client with whom I lose my patience! I have a potential at the mo ...)

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Replying to atleastisoundknowledgable...:
By paul.benny
25th Mar 2021 08:43

Agree. Just emphasising the lack of practical options to drive compliance with accounting standards when financial statements are unaudited.

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Replying to paul.benny:
John Toon
By John Toon
25th Mar 2021 09:41

You could withhold your accountant's report from the accounts but unlikely to make much difference!

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