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Business Acquisition Only Talent Resource Acquired

Others 203 views 1 replies
We have recently acquired a business (only Manpower resources took over) for a consideration.

in such scenario how do we start recognizing opening balances in the books of accounts.

no other assets were transferred to us.
Replies (1)

This is also a part of operations and cant argue. Acquisition is only through equity. So create a separate account, Salaries, benefits etc and use NCI method to distribute the expenses accordingly. This can be called as outsourcing and you will be responsible for any tax consequences. Instead, you should have let the other company deal with salaries and use the mergers philosophy to hold the management under your company. If your 100% sure that the acquisition will be complete this year, then just report the part that you have acquired

This looks complex, let me guess, 

Investment in subsidiary a/c (until now)

To bank a/c

then start recording pension asset or obligation, service costs payable, pension liabilities, interest costs, revaluation gains and losses, net interest expenses or losses. I am sure you know that profits will be reducing if things don't go as planned. It is not hard to achieve the balance sheet though as you are aware. 

 


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