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Transfer of Stock Ownership

What will be the accounting treatment for transfer of stock ownership from intermediate holding company to ultimate parent for NIL consideration? Will there still be goodwill recognition? E.g. Entity A owns Entity B and Entity B owns Entity C. Entity B transfers its ownership of Entity C stocks to Entity A. This means that the ultimate beneficial owner will not change except that the structure will change since Entity B will already be out of the picture.


Topic Expert
Wayne Spivak
Title: President & CFO
LinkedIn Profile
(President & CFO, |

Not my strong suit, but I'll give this a stab:.

Nothing changes at the "C" Entity, except changing the name of who owns the stock. There was no financial consideration in the transfer.

Between "B" and "A" there would be a financial transaction based on the value of the stock transferred (at a minimum, book value). Probably handled thru an intercompany account.

There could also be a valuation adjustment.

Best bet is talk to your CPA advisory/tax or auditing firm for the best treatment based upon not only exactly how your set-up but tax treatment.


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