Limited company 1, purchased shares from individuals who between them owned 100% of the shares in Limited company 2, how best does company 1 account for the monies paid to individuals in there management accounts? I assume that the value of shares owned in company 2 should be shown as a fixed asset of company 1? do i use a Shares owned fixed asset accountign code and credit monies to there?
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Yes (although it's a debit, not a credit).
Depending on the size of your companies you might also have to prepare consolidated (group) accounts.
I might be being pedantic but I would suggest that it is an important distinction that these shares are shown as an investment, not as a fixed asset.
They would require a seperate policy and note in the financial statements and therefore I would show seperately in management accounts.