Discussion:Intercompany Accounts Classified as Equity?
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Discussion Forum Index --> Accounting Questions --> Intercompany Accounts Classified as Equity?
Karendhill (talk|edits) said: | 19 June 2009 |
| Client has two C corporations that are parent and sub. When he established the subsidiary corporation, he wanted all assets and liabilities moved to the subsidiary, since that became the operating company. There is no longer business activity in the parent company. There is now an intercompany account that is the offset to the transfer of the assets and liabilities. It happens to be an asset account on the books of the sub. and a liability on the books of the parent company. Question: Can these intercompany accounts be classified to the equity section of the balance sheet? Client presents financials of the sub to potential investors and they don't like this presentation. I need to conform to GAAP and cover my behind here. | |
Karendhill (talk|edits) said: | 19 June 2009 |
| This question is really an accounting question not a tax question. Sorry for the mispost.
Edited - question has been moved to the accounting forum! | |
| 19 June 2009 | |
| From the perspective of the sub, that asset isn't really an asset. It is equity. | |
Karendhill (talk|edits) said: | 19 June 2009 |
| Jerry - what should the title of the account be? (It will be a negative equity account). | |
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