Investment

[Dec]

All,

I would appreciate your help with a query, I have an intermediate understanding/qualification for accounting and am currently in the process of developing a statutory consolidation model as such some of the finer points still evade me.

I have been asked to show how the model will handle Company A investing $10million in Company B, in this instance Company B is already 100% owned by Company A.

I can see this being handled by B issuing more shares which are owned by company A.

Are there other ways for the extra investment to occur that I haven't considered?

 

[kirby]

If "invest" includes "lending money to B" then Co A can just lend $10 MM to Co B. But if "invest means strictly a stock investment then Co B has to issue shares to A for the $10MM, can be common or preferred.