Please Help: Consolidation of Financials of Subsidary Company
Posted Date : 21-Dec-2011 , 06:16:11 pm | Posted By Anshul sharma
What is Analysis of Profit. How to distribute the profits of Holding befor Aquistion of Shares
Category : Accounts | Answers : 2 | Comments : 1 | Hits : 355
Answers
Answer By: AKHIL MAHESHWARI
Dear Anshul, as correctly answered by Rupesh, analysis of profits may be done by dividing in two parts i.e. pre acquisition profits (profits before acquisition of shares by holding co.) and post acquisition profits (profits after acquisition of shares by holding co.)........... pre acquisition profits are deducted out of the cost of investment which is cost of shares acquired by holding co. while post acquisition profits will be added to p & l a/c of holding co....... Hope the above answer is fully understandable.....
Answer By: AKHIL MAHESHWARI
Such bifurcation will be done in two parts of the respective financial year/ period i.e. pre and post acquisition period......
Comments
rupesh munawat
22-Dec-2011 , 10:28:38 amprofits have to be classified as pre acquisition n post acq profit...i.e profits b4 acq of shares by holding co. n after acq of shares by holding co. pre acquisition profits goes to reduce te cost of investment i.e cost of shares acquired n post acq profit is added in p & l acc of holding co..