Dear all,
Good day!
A holding company had a subsidiary which is 100% owned. In 6 March 2006, the subsidiary issued new shares from $2 to $50,000 which changed the shareholdings from 100% to 40%.  As I read this is considered as deemed sale. The year ended of the holding company and the subsidiary is 31 December 2006.
These are my queries:
In view of the Holding company, how much is the equity take up considering the date of deemed sale?
In view of the holding company, how to compute for the gain/loss of the deemed sale of the subsidiary? How to compute for the cash inflow/outflow of the deemed sale of subsidiary? How is the accounting treatment and the related accounting entries? In consideration of the date of the deemed sale made during the accounting period.
Also, how to account the deemed sale in the cashflow statement?
The reply is highly appreciated.
Thank you
herma