What is the treatment of shareholders current account in consolidation? Does it need to be eliminated?
And what is a “shareholders current account”?
I don’t know what you mean by a “shareholders’ current account”? Can you tell me what the purpose of the account is and where on the balance sheet it is located?
What I mean with Shareholder’s Current account is an amount deposited by the shareholder in excess of the share capital. This amount in the future is to be invested in another company, subsidiary.
Are you sure you are trying to apply IFRS? Sounds more to me like you’re trying to convert some “National GAAP” to a report that resembles IFRS.
I’m still trying to understand the initial transaction and how the account is created. Is this what you mean?
Parent company = P
Subsidiary company = S
Someone contributes $100 to P in exchange for 8 shares of P’s $1 Par common stock with a market price of $10. The remaining $20 is given to P for a FUTURE purchase of shares in S? Or is the additional $20 given to S for shares in S?
One possible interpretation is that the shareholder bought shares of P and also purchased part of P’s investment in S.
The more explicit you can be about the original transaction, the better I can answer how that transaction itself would be accounted for under IFRS. Then, I can tell you whether it gets eliminated in consolidation.
Message from Dina
What I mean with Shareholder’s Current account is an amount deposited by the shareholder in excess of the share capital. This amount in the future is to be invested in another company, subsidiary
You simply repeated what you said previously and it still doesn’t make any sense to me.
Deposited with what company? In excess of what share capital, the amount that the shareholder originally contributed?
Please tell me what the journal entry was when this amount was deposited? And what company’s books is the account on?
Shareholde’s current account – http://www.ifrslist.com/2010/09/sharehol…
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