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Homework answers / question archive / A company decides to suspend operations in a loss-making manufacturing division and transfer all the assets of that division to its group company at the values appearing in the balance sheet as of the date of transfer at a share issuance ratio of 2

A company decides to suspend operations in a loss-making manufacturing division and transfer all the assets of that division to its group company at the values appearing in the balance sheet as of the date of transfer at a share issuance ratio of 2

Accounting

A company decides to suspend operations in a loss-making manufacturing division and transfer all the assets of that division to its group company at the values appearing in the balance sheet as of the date of transfer at a share issuance ratio of 2.5:1. The group company issues its own shares as purchase consideration to the transferring company. This amounts to:

(a) Demerger                                              (b) Hive-off not amounting to demerger

(c) Asset sale                                               (d) Spin-off

(e) Purchase in the nature of demerger    (f) Spin-off in the nature of hive-off

(g) Asset carve out in the nature of demerger (h) Spin-off in the nature of a demerger

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