Discussion:Investment In Subsidiary (Urgent Query)

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Discussion Forum Index --> Accounting Questions --> Investment In Subsidiary (Urgent Query)


Asanga95 (talk|edits) said:

8 December 2013
Hi Everyone, I have aquestion in relation to one of my client's accounting treatment for "Investment in subsidiary". Background to issue is as below:

My client "Company A" is wholly owned subsisdiary of XYZ Group of Company". "Company A" owned (100% ownership)a subsidiary called "Compnay S". Accounting treatment in "A" books was Dr $100,000-Investment in Subsidiary "S" and Cr $50,000- Share Capital & Cr $50,000- Cash as this was a transaction done with a exchange of share capital and cash.

Recently "Company S" aquaired company called "Company Q" and due to this aquisistion "S" recognised a goodwill amounting to $40,000 under Intangible Assets in its Statement of Financial Position.

My quetsion is, based on this Company-S's new aquisition of "Q" and its recognition of goodwill of $40,000, does these matters have an impact on the investment in Company A's recognition of investment in Company-S? Can Company-A revalaue the investment in Company-S? If possible, what would be the accounting treatment?

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