What's happened previously is that the net assets of a company are merged with Sub1 and then the old shareholders of the merged company buy shares in the group company...presumably with the consideration paid to them from Sub1.
...somehow there appears to be goodwill arising on this within Sub1.
I'm not understanding how the goodwill gets there and whether or not the goodwll arises on the whole amount £577K or just parts of it?
The more I look at this the confused I get!
The merger will occur between the external company and Sub1.
The holding company will then issue new shares to the value of £200K to the new shareholders (presumably the shareholders are paid £200k and they then buy the shares).
in addition to this Sub1 will have paid out £300k to the exiting share holders of the pre-merged company and will have incurred £77K in related legal costs etc.
How are these costs accounted for?
...more information needed I guess.
It's a group of four companies - one holding and three subs. The shareholders own the holding company and the holding company own the subs.
The holding company is looking to merge with a separate company (that will become 'Sub4') by paying off exiting shareholders of Sub4. The remaining shareholders of Sub4 will be issued shares from the holding company.
I'm trying to map out the double entry. Presumably, all of the pre-merger shareholders in Sub4 will have their shares bought from them and the remaining shareholders will buy shares in the holding company?
...on that basis, I guess its - Dr. bank, Cr. Share Cap in the holding company and Sub4 is consolidated with no share capital?
Yep - I think that's the best route....I'm already part-way to achieving this, I've already been giving a huge chunk of the accounting responsibilities - I'm just at the uncomfortable stage of trying to make it work.
Chatting about this on here has put my mind straight though!
This is exactly what I was thinking (this is my post by the way, I started it anonymously but then realised that you can't reply anonymously!).
I too was made redundant four years ago and one of the things that put me off completing my studies was that the ACCA were absolutely horrible during the time that I was out of work....for all the years that I paid my student subscription, their message to me was "we don't care that you're not earning, we want our money"....the AAT, on the other hand were completely sympathetic.
I also have had similar experiences with 'qualified' accountants and have mostly been left wondering how they maintain gainful employment. I remember once being audited by BT and I spotted a huge material error in the previous years numbers - BT told the board that they wouldn't put through a prior year adjustment as it would make them look stupid!
I think my mind is made up!
I think one or two people here are not getting the point (... and I mean that totally respectfully, perhaps I was too vague in my description...I've been deliberately vague in case anyone recognises the company or people involved).
The accounts manager is in charge of the accounting system and it took me a long time to convince him that I even needed a login and I accessed the numbers via SQL.
As far as chart-of-accounts and accounting entries go, he thinks he is running the perfect system and there's nothing that can be done to improve it - he thinks my role is a waste of resources (despite the board thinking that my analysis is the best they've ever had and is key to running the business), and anything that I suggest (more nominal codes, posting things to the correct place etc) is disregarded as he's never heard anything like it in all his years.
So...each month I take the TB and re-analyse it....he (or she lol) spends a day creating and posting the payroll journal - I spend a day re-analysing it my 'system' etc etc.
What I'm trying to avoid is my argument being taken as one person's opinion...my word against his. So I'm looking for any kind of documentation to say that, 'generally', this is how it should be.
...that made me laugh!
I totally agree - I was originally brought in as a consultant to make that happen, unfortunately (as is the case with most consultant assignments), I presented the board with the solution that they were looking for and they decided that it would be best not to change a thing!
I'm now employed by the company and my job basically consists of correcting things on the face of an excel spreadsheet before it goes out to the board - I wait for the numbers to be ready each month and extract a TB and spend a lot of time trawling through transactions and adjusting everything into it's correct place.
This is obviously completely inefficient and means that the monthly management accounts aren't ready until around the third or fourth week in the month following.
It's not really a 'chart of accounts' problem (it's my thread by the way - I started it anonymously but then realised that you can't respond anonymously!).
I'm sure each CoA template will have similar headings but if the guy driving the accounts department does't know what 'Entertaining' means, it's not going to work.
I take your point on the 'qualified' thing...this IS all down to the individual :-D
I agree with that totally.
I guess I'm at an age where I'm thinking about completing things that I had every intention of finishing when I started (I'm not including my bathroom or kitchen in that...both of those I have good reasons/excuses for).
I guess it's more about ego than anything - I had a career in music before I started in accounting (hence the late start), I never had any music related qualifications despite being quite a successful recording and performing musician, I always felt a bit of a fraud so, in 2016 I sat and passed two sets of grade 8 music exams - I now feel that I've rounded that off and can properly call myself an expert rather than trying to convince people that i'm 'the equivalent to a grade 8 musician'.
I guess I feel the same about accountancy - although, in answer to your question, it wouldn't make any difference to me whatsoever....and that's probably the deciding factor.
I'm hoping to bring in a purchase ordering system where each budget holder can specify where each item is to be coded within their own section of the P&L - this should ensure that each cost gets to where it's supposed to be (as every cost has an 'owner').
I'm not looking for a standard to tell me how to do anything - I'm merely looking for some kind of backup to the way that I was taught and the way that everybody that I've encountered does things.
Sure it's an art, but we're talking about things that are actually wrong as opposed to a difference of opinion.