Ireland Valuing an associate company

[Michelle H]

‘I am completing an impairment review on an investment in an associate company.

Company A was set up to purchase company B.

When calculating the net assets of company B do I include the debtor owed to company A?

Also the balance of shares -66.67% in Company B is owned by the director of Company A-does this have any impact?’

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[Praz Finpoint]

1. The answer is yes.

2. If the Director of Company A owns the remaining 67% of the shares in Company B, and through his own shareholdings and the shareholdings via Company A, can influence and direct the business of Company B, should you not consider Company B in reality is a subsidiary of Company A since it is clearly under the control of the Director of Company A? Need more information on this.