Suraj Suresh Utekar (Accoutant) (42 Points)
21 January 2024Hello team,
Can you please share me the Accounting of Capital Contribution for below mentioned scenario.
If my Netherlands Entity took a loan from various subsidiaries and invest the same amount i.e. 67.8 mn to contribute a capital in GFK company. How can I record an accounting entries in the books of Netherlands and GFK entities?
Yasaswi Gomes new
(Finance )
(4514 Points)
Replied 21 January 2024
Since consolidation is not there just do it the normal way like
Netherland books
Dr. Bank
Cr. Loan from subsidiary
And for cash investment
Dr. Investment at cost
Cr. Bank
Gfk books
Dr. Bank
Cr. Equity netherland
Yasaswi Gomes new
(Finance )
(4514 Points)
Replied 21 January 2024
Forgot to mention, translation risk is not there if presentation=functional currency. If it is India, then no risk as well if amount paid in one shot. If it is in installments, I think you have to discount cash outflows in arrears with wacc I think or maybe for equity exchange. Pls check that out cause I don't have resources available right now and not at my office
Yasaswi Gomes new
(Finance )
(4514 Points)
Replied 21 January 2024
@ sabyasachi, your not IFRS accountant like me but just only an AS accountant and not even Indas accountant like me as well and do you remember that
Suraj Suresh Utekar
(Accoutant)
(42 Points)
Replied 21 January 2024
@ yashaswi Gomes new Yes it's correct entry.
CAclubindia
