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Hello
There is Company A which holds 100% of the share capital of Company B which in turn holds 100% of the share capital in Company C. The 3 companies are currently prepared under UK GAAP/CA 2006 but will be adopting FRS 101 at 31 December 15.
To save on audit fees, all the assets in Company C are to be transferred to Company A leaving Company C dormant.
Company C holds intangible and tangible assets, stock, debtors and cash. Company C also have a negative P&L reserve.
I understand from CA 2006 that due to the negative P&L reserve i.e. no distributable profits that transfers have to be at least a book value which would be fine here as the assets are stated under historical cost.
Could someone kindly let me know the accounting implications of doing the above in each of the companies. For example, as Company C will be dormant, we would show impairment of this in Company B(100% owner).
There is Company A which holds 100% of the share capital of Company B which in turn holds 100% of the share capital in Company C. The 3 companies are currently prepared under UK GAAP/CA 2006 but will be adopting FRS 101 at 31 December 15.
To save on audit fees, all the assets in Company C are to be transferred to Company A leaving Company C dormant.
Company C holds intangible and tangible assets, stock, debtors and cash. Company C also have a negative P&L reserve.
I understand from CA 2006 that due to the negative P&L reserve i.e. no distributable profits that transfers have to be at least a book value which would be fine here as the assets are stated under historical cost.
Could someone kindly let me know the accounting implications of doing the above in each of the companies. For example, as Company C will be dormant, we would show impairment of this in Company B(100% owner).