WHEN DATE OF ACQUSITION OR PURCHASE OF SUBSIDIARY COMPANY AT THE BEGINNING OF THE YEAR

 

WHEN DATE OF ACQUSITION OR PURCHASE OF SUBSIDIARY COMPANY AT THE BEGINNING OF THE YEAR

FOR THE SECOND METHOD, THE FOLLOWING WORKING NOTES SHOULD BE DOME, BEFORE DOING MAIN SOLUTION

 Working note

1. Calculation of share ratio
No. of shares in Subs. co. = Share cap. amount in subsidiary company / Face value of equity shares
Holding company : Minority Interest
2. Calculation of capital profits
Reserves and profits & Loss account balance given in the adjustments xxxx
Total capital profits xxxx
Holding company = Capital profits x Share ratio
Minority interest = Capital profits. x Share ratio
3. Calculation of Revenue profits
Reserves and profit and loss account amount of subsidiary which given int he balance sheet	xxxx
Less: Total capital profits	xxxx
Total revenue profits	xxxx
Holding company = Revenue profits x Share ratio (transfer to Note: 2)
Minority interest = Revenue profits x Share ratio
4. Minority interest
Nominal paid up share capital amount	xxxx
Capital profits	xxxx
Revenue profits	xxxx
Total minority interest (transfer to liabilities side)	xxxx
5. Cost of Control: (Holding company)
Nominal paid up share capital amount xxxx	xxxx
Capital profits xxxx xxxx	xxxx
Less: Investment of shares in Subsidiary company	xxxx
(-) Goodwill (transfer to Note No: 8)	xxxx
(+) Capital reserves (transfer to Note No:2)