Winding up companies

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sgaccountant
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Joined: 25 Feb 2022, 10:25

Winding up companies

Post by sgaccountant »

Dear All,

I've never done winding up of companies before but there's a dormant entity in my company that they are planning to wind up/deregister soon.

What are the activities and common journal entries that an accountant have to perform to support the deregistration process?

Do we have to zerorise everything in the ERP system?

Many thanks!
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Marek Muc
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Re: Winding up companies

Post by Marek Muc »

In consolidated financial statements, remember that all amounts previously recognised in other comprehensive income in relation to that subsidiary should be accounted for on the same basis as would be required if the parent had directly disposed of the related assets or liabilities, i.e. transferred to P/L as a reclassification adjustment (e.g. foreign currency translation) or directly to retained earnings (IFRS 10.B99).

https://ifrscommunity.com/knowledge-bas ... of-control

as for cleaning the ERP, I suppose you need to keep it for some time e.g. for tax purposes, but it depends on the law in you country
JRSB
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Re: Winding up companies

Post by JRSB »

ultimately everything will be zero but technically depends how you get there, ie either realising all assets/ settling liabilities, or hiving up all net assets to parent, or capital distibution of assets, etc
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