Minority Shares Buyback

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Finance and Investing > Best Practices > Minority Shares Buyback

Minority Shares Buyback
Amir, Accountant, Egypt, Member

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,. (...) Read more? Sign up for free
 

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