There are two ways to dispose of the equity of subsidiaries. The difference between the two situations is whether the parent company still has control over the subsidiary, which is very important.

1. Accounting Treatment for Disposal of Part of the Equity of a Subsidiary without Loss of Control:

1. Individual note: the difference between the purchase price and the book value of the long-term investment sold (= book value of the long-term investment * sale ratio/original shareholding ratio) is included in the investment income.

2. Consolidated statement: the difference between the disposal price and the disposal equity enjoys the continuous calculation of the net assets of subsidiaries, and is included in the capital reserve (capital premium or equity premium) when accounting.

3. No matter whether the investment is increased or decreased, in the consolidated statements, the investment income is not recognized (increasing the capital reserve) when the investment is disposed of, and the goodwill is not recognized (decreasing the capital reserve) when the equity is added, which are all reflected in the "capital reserve".

Second, the accounting treatment of losing control due to the disposal of part of the equity of the subsidiary:

(1) Personal report:

1. The parent company lost control due to the disposal of part of the equity of its subsidiary. The accounting entries are as follows:

Debit: bank deposit

Loan: Long-term equity investment (write down in proportion)

yield

2. Disposal of residual equity (without control and significant influence): recognized as long-term equity investment or other related financial assets according to its book value: a: changed from controlled cost method to uncontrolled cost method; B: Change from cost control method to financial assets (no retrospective adjustment)

3. Residual rights and interests have a great influence on Atomic Company, and the cost method was changed to equity method for retrospective adjustment.

The retrospective book value of the remaining long-term equity investment = original book value-disposal value+value retroactively adjusted according to the equity method (adjusted net profit accounting is used to debit long-term investment and credit undistributed and surplus or investment income).

(2) Consolidated financial statements

1. Residual equity shall be re-measured according to the fair value on the date of loss of control.

2. Income from disposal of investment in the current consolidated statement = [(consideration obtained+fair value of residual rights and interests)-original share]-goodwill+(or-) other comprehensive income × original shareholding ratio.

Original shares = net assets continuously calculated by Atomic Company from the date of purchase × original shareholding ratio.

Can the losses arising from the transfer of subsidiaries be deducted before tax?

You can't.

1. Loss caused by parcel transfer

Article 9 of the Announcement of State Taxation Administration of The People's Republic of China Municipality on Issuing the Administrative Measures for Pre-tax Deduction of Enterprise Asset Losses (State Taxation Administration of The People's Republic of China Announcement No.25, 20 1 1) stipulates that the following asset losses shall be declared and deducted to the tax authorities in the form of list declaration:

(1) Losses from selling, transferring or selling off non-monetary assets at fair prices in the normal operation and management activities of the enterprise;

(two) the normal loss of enterprise inventory;

(three) the loss of fixed assets that the enterprise has reached or exceeded its service life and is normally scrapped and cleaned up;

(four) the loss of assets caused by normal death when the productive biological assets of the enterprise reach or exceed the service life;

(5) Losses incurred by enterprises in buying and selling bonds, stocks, futures, funds and financial derivatives through various trading places and markets in accordance with the principle of fair market transactions.

Article 10 stipulates that the loss of assets other than those specified in the preceding article shall be declared and deducted to the tax authorities in the form of special declaration. If an enterprise cannot accurately determine whether it belongs to the asset loss declared and deducted in the list, it can declare and deduct it by special declaration.

Article 47 stipulates that if an enterprise bundles (packages) different kinds of assets and sells them by auction, inquiry, competitive negotiation or bidding, the difference between the selling price and the taxable cost can be regarded as the loss of assets and allowed to be deducted before tax, but it should provide the asset disposal plan, the pricing basis of various assets, the description of the sales process, the sales contract or agreement, the transaction and accounting vouchers, and the basis for determining the tax basis of assets.

According to the above regulations, your company packaged and sold the equity and part of the creditor's rights of its wholly-owned subsidiary to Company A, and the losses (including the loss of equity and creditor's rights) were deducted before tax by special declaration.

2. Repaying the debt losses of subsidiaries

Article 8 of the Enterprise Income Tax Law stipulates that reasonable expenses actually incurred by an enterprise, including costs, expenses, taxes, losses and other expenses, are allowed to be deducted when calculating taxable income.

Article 10 stipulates that when calculating taxable income, the following expenses shall not be deducted:

(8) Other expenses unrelated to income.

How to calculate the income from the sale of subsidiaries? Bookkeeping should be handled according to the specific situation of the subsidiary. Selling a subsidiary is a very big account, and it involves many problems, not only bookkeeping, but also tax issues. Finance should also be clear about the accounting and taxation aspects of all subsidiaries in order to be invincible in the work.