BUCC - Subsidiary merged into parent
BUCC - Subsidiary merged into parent
Hello everyone,
I have a question. In a scenario where a wholly -owned subisidiary is merged into its parent, it is my understanding that such transaction is outside the scope of IFRS 3. Is the difference between the investment in sub and the merged assets and liablities recognised in equity in the parent´s separate FS?
I have a question. In a scenario where a wholly -owned subisidiary is merged into its parent, it is my understanding that such transaction is outside the scope of IFRS 3. Is the difference between the investment in sub and the merged assets and liablities recognised in equity in the parent´s separate FS?
Re: BUCC - Subsidiary merged into parent
Is there any goodwill recognised with respect to this subsidiary in consolidated financial statements?
Re: BUCC - Subsidiary merged into parent
Yes, let´s assume it is. I presume that the goodwill will still remain in the consolidated FS, or am I wrong? I couldn´t find anything specific on this issue. I had a look at the DP issued by IASB, but such a case is not mentioned.
https://www.iasplus.com/en/news/2020/11/bcucc
https://www.iasplus.com/en/news/2020/11/bcucc
Re: BUCC - Subsidiary merged into parent
Consolidated financial statements will obviously not be imapcted by this merger.
And you can recognise this goodwill in separate financial statements as well, I've seen this approach in practice.
And you can recognise this goodwill in separate financial statements as well, I've seen this approach in practice.
Re: BUCC - Subsidiary merged into parent
Ps. Identical goodwill as in consolidated financial statements, and the remaining difference goes to equity
Re: BUCC - Subsidiary merged into parent
This is interesting about recognising the goodwill in separate financial statements.
Thank you very much Marek.
Thank you very much Marek.
Re: BUCC - Subsidiary merged into parent
Yes interesting but it makes sense if you think about it, this is just the same acounting as was done before merger. The merger itself is more like an internal reorganisation within the group.
Re: BUCC - Subsidiary merged into parent
Yes, you are right. It is just that I have not heard about it nor seen it in practice yet.
Re: BUCC - Subsidiary merged into parent
Thank you. This is helpful. I noticed that they presented it retrospectively.
Re: BUCC - Subsidiary merged into parent
No they did not, don't confuse primary financial statements with pro forma information in note 3
Re: BUCC - Subsidiary merged into parent
Yes you are right, I was too quick with my reply .