Hello,
I hope somebody can give me some advice on this:
My company is just founding a joint venture in another country together with the joint venture partner. Only 10% of the 50% share of my company are brought in in Cash (the rest (40%) are brought in using intangible assets (customers relations --> customers of my group that are transferred to become customers of the newly founded joint venture)).
My question now is how to account for this scenario in IFRS.
I know that when the cash transfer (the 10%) happens, following transaction is recorded in our holding company:
debit: Investment in associates (value: 10%)
credit: Bank (value: 10%)
But what about the 40%? Actually I would assume that my company can activate 50% investment in associates in the holding company. Is this correct? And if so, is the remaining 40% recorded as some kind of badwill (negative goodwill) income in the P&L?
If that is true, I would record following booking in addition to the one described above:
debit: Investment in associates (value: 40%)
credit: Non Operating Income (special items) (value: 40%)
Any help is very much appreciated. I did not find any case like this on the Internet.
Thanks
I hope somebody can give me some advice on this:
My company is just founding a joint venture in another country together with the joint venture partner. Only 10% of the 50% share of my company are brought in in Cash (the rest (40%) are brought in using intangible assets (customers relations --> customers of my group that are transferred to become customers of the newly founded joint venture)).
My question now is how to account for this scenario in IFRS.
I know that when the cash transfer (the 10%) happens, following transaction is recorded in our holding company:
debit: Investment in associates (value: 10%)
credit: Bank (value: 10%)
But what about the 40%? Actually I would assume that my company can activate 50% investment in associates in the holding company. Is this correct? And if so, is the remaining 40% recorded as some kind of badwill (negative goodwill) income in the P&L?
If that is true, I would record following booking in addition to the one described above:
debit: Investment in associates (value: 40%)
credit: Non Operating Income (special items) (value: 40%)
Any help is very much appreciated. I did not find any case like this on the Internet.
Thanks