The parent company is turning the subsidiary's operations over to the subsidiary's
Can someone share the journal entries on a parents books when a wholly-owned subsidiary is disposed of?
Answers
Suggestion: While we can provide you with the entries, why not ask your
I agree with Wayne. There are also
Some items will be addressed in the "sale" agreement.
Another consideration is the assumption of liabilities and by whom for items such as Capital Leases, Leases from any landlords along with any deposits the Landlord is holding.
To come up with a comprehensive JE, the need to factor in these items plus others must be considered.
I agree with both of the above responses. You must determine what are all of the items on the parent company's books that relate to the subsidiary, such as leases, perhaps deferred taxes, etc. When you determine all of the parent company's write-offs and adjustments, the balancing entry is more than likely going to be a loss on disposal.
Also, remember to adjust or reverse your consolidating elimination entries and make sure that the subsidiary no longer rolls up in consolidation after the disposal date.
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Accounting