Minority Shares Buyback




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Amir
Accountant, Egypt

Minority Shares Buyback

Hi, I'd like to ask about accounting for shares buyback for the following case:
10% of the shares of company A are owned by an investor. Company B buys those 10% shares from the third party investor. Company A and B are subsidiaries and their parent is a holding company (consolidation) the both financials are represented there.
Par value of the shares was 100 and the purchase price is 140. On company B investment with recorded with cost (140), on the consolidated financial, shall we record only the excess of par value (40) as goodwill or we should re-valuate the shares' fair value (assume at the moment of acquiring the 10%, the share fair value was 80) and the difference (140 - 80 = 60) should be recorded as goodwill?
Thanks for advising,.
 

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1
enyaru antony
Business Consultant, Uganda
 

Your Answer

Yeah, goodwill shall be 40 the non tangible value of the purchase since the cost originally was 100,... Sign up

 
1
Henry Steyn
Analyst, South Africa
 

Calculation of Goodwill

Goodwill = (number of shares purchased x purchase price) - [(total number of shares x par value + re... Sign up

 
1
luckmore mutisi
Student (MBA), Zimbabwe
 

Goodwill

I agree with Enyaru Antony, goodwill will be 40 because the cost was 100 and selling 140. The differ... Sign up

 
1
Popoola Ife
Accountant, Nigeria
 

Minority Shares Buyback

I agree with previous statements to the extent that there is still positive goodwill of 40. That is,... Sign up

 
1
Girish L. Chhagani
Coach, India
 

Minority Shares Buyback Method

Book value of shares = 10% (share capital + capital reserves and surplus as on date of purchase of s... Sign up

 
2
Amir
Accountant, Egypt
 

Minority Shares Buyback Accounting Method

Thanks all, thanks for your input and advices, here is what has been done which I consider complies ... Sign up

   

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