Avail 20% discount on updated CA lectures for Dec 21 .Use Code RESULT20 !! Call : 088803-20003

ICICI

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

priyanka pal   23 August 2020

COA of share held in demerged company

whether liab deducted while computing net book value of assets transferred in demerger.


 4 Replies

yasaswi gomes

yasaswi gomes (My grammar is 💯 good I)     23 August 2020

As per IndAS, a subsidiary has liabilities and recognised in the consolidated statements does not mean parent company will clear out the liabilities. Liabilities are consolidated and presented in the balance sheet for the investors interest in financial position of a group company. The subsidiary, a CGU, is a going concern/business entity which generates independent Cashflows to meet its liabilities. 

A parent sells off the firm to a party or to subsidiary itself. Then, the tax liability arising due to de merger or sale of CGU is borne by the parent. 

priyanka pal

priyanka pal   23 August 2020

Sorry, but my concern is for computing COA of share of resulting company u/s 49(2C) whether to deduct liab while computing net book value of assets transferred in demerger?
yasaswi gomes

yasaswi gomes (My grammar is 💯 good I)     23 August 2020

Just like I suspected, net book value is the subsequent measurement of all tangible and intangible assets. 

No need to deduct liabilities from net book value because the formula requires Net worth (equity components) in the denominator. It is clearly explained here: https://incometaxmanagement.com/Pages/Tax-Ready-Reckoner/GTI/Capital-Gain/Deemed-Cost-of-Acquition-of-Asset-for-computing-Capital-Gain.H T M L

1 Like
priyanka pal

priyanka pal   23 August 2020

Thank u
1 Like

Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register  


Related Threads


Loading
Start a New Discussion

Popular Discussion


view more »







Subscribe to the latest topics :
Search Forum:

Trending Tags