Winding up of Subsidary

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SaadOlath
Posts: 53
Joined: 22 Dec 2019, 10:50

Winding up of Subsidary

Post by SaadOlath »

Hello,

If A Subsidiary has wound up during the year, when calculating gain/loss [Proceed - Carrying amount] on deemed disposal of the Subsidiary at the Parent Level, Can we say that proceeds = net assets of the Subsidiary?

In the book of the Parent

Investment in Subsidiary $100,000

In the book of the Subsidiary

Asset $150,000
Liabilities $100,000

The remaining amount of $50,000 will be distributed to the Parent.

Loss on deemed disposal of Subsidiary recognised at Parent Level

Proceeds $50,000
Carrying amount of Sub $100,000

Loss on deemed disposal ($50,000)

Is it correct?
JRSB
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Re: Winding up of Subsidary

Post by JRSB »

yes
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Marek Muc
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Re: Winding up of Subsidary

Post by Marek Muc »

You need to check what assets will be distributed to the parent and what liabilities of the subsidiary assumed. It may be different than the net assets value as reported in the separate financial statements of the subsidiary.
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