Consider Example 1 : Suppose Company A purchases the "entire business" of Company B (without liquidation) and Company A issues shares to the shareholders of Company B. Company B then becomes an investment company with "only" an "Investment at A Ltd( at the value of purchase consideration)" showing at Assets side of the balance sheet.
Now consider Example 2 : Suppose Company B purchases the "entire shares" of Company B ( without liquidation ) and Company A issues shares to the shareholders of Company B. Investment in B Ltd ( at the value of purchase consideration) is shown in Company A's balance sheet . All the assets and liabilities of Company B are shown in Company's balance sheet only.
What's the logic and difference between the above 2 examples(with detailed explanation)?? Thanks in advance.
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