Hi guys,
I wonder if anyone could advise me on the accounting treatment of the following.
P wholly owned S, S was placed under members voluntary winding up in current year.
In this FY, P's balance sheet shows cost of investment of £100,000, amount owing to subsidiary S of £200,000. Return of surplus assets of £200,000 to P.
My queries on P's books are:
- What would happen to the cost of investment of £100,000? To written off?
- How to account for the return of surplus £200,000? Deemed dividend? What is the accounting entry?
- What would happen to the amount owing to subsidiary, S of £200,000? Waived and acounted in reserve?
- P will only need to consolidate S up to winding up date right?
Many thanks in advance.
I wonder if anyone could advise me on the accounting treatment of the following.
P wholly owned S, S was placed under members voluntary winding up in current year.
In this FY, P's balance sheet shows cost of investment of £100,000, amount owing to subsidiary S of £200,000. Return of surplus assets of £200,000 to P.
My queries on P's books are:
- What would happen to the cost of investment of £100,000? To written off?
- How to account for the return of surplus £200,000? Deemed dividend? What is the accounting entry?
- What would happen to the amount owing to subsidiary, S of £200,000? Waived and acounted in reserve?
- P will only need to consolidate S up to winding up date right?
Many thanks in advance.