Many thanks.
'A' currently has a cost of investment of £300k (and let's say a bank loan of £300k for ease).
B's net assets are say £50k.
Once the net assets/dividend go up then I have a cost of investment of £300k in a dormant subsidiary (albeit my assets are £50k higher because of the divi).
So what do I do with the £300k? If I write off then BS goes negative.
Or do I use acquisition accounting and account for GW at fair value of £250k and write off cost of investment?
It is not a APN. Just an invitation to pay on basis that scheme doesn't work. Client worried about penalties much further down the line. My view was that as the scheme was promoted be Tenon then it must have been popular. Hence is there any consensus on a way forward.
My answers
That case was very useful possep. Thank you.
Many thanks guys
Many thanks.
'A' currently has a cost of investment of £300k (and let's say a bank loan of £300k for ease).
B's net assets are say £50k.
Once the net assets/dividend go up then I have a cost of investment of £300k in a dormant subsidiary (albeit my assets are £50k higher because of the divi).
So what do I do with the £300k? If I write off then BS goes negative.
Or do I use acquisition accounting and account for GW at fair value of £250k and write off cost of investment?
Thanks
Yes, the vendors are connected.
Thanks. The trade is commercial property rentals. The properties are not being sold.
They are two excellent responses. Many thanks. It was the VAT aspect that kicked the whole thing off!
May thanks Paula, yes I've heard of this and that is one route we may take.
It is not a APN. Just an invitation to pay on basis that scheme doesn't work. Client worried about penalties much further down the line. My view was that as the scheme was promoted be Tenon then it must have been popular. Hence is there any consensus on a way forward.
Some great replies there. Thanks.