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danslearning
Level 2

How to Categorize Initial Investments into Subsidiary for Parent Company?

So how should one properly account for the initial investments to start a subsidiary in the parent companies books? 

Should I be adding an asset and tracking everything this way? Should I just be recording it as an expense with a simple memo?

 

My subsidiary does have a separate subscription and I understand how to record the initial investments there but not the parent company. I though I had read it before somewhere here but I'm unable to find the same thread again.

2 Comments 2
Rainflurry
Level 14

How to Categorize Initial Investments into Subsidiary for Parent Company?

@danslearning 

 

Record it as an 'Other Asset' called "Investment in <Name of Subsidiary>".  It is most definitely not an expense.  You can write a check and assign the "Investment in <Name of Subsidiary>" category to the check.   

danslearning
Level 2

How to Categorize Initial Investments into Subsidiary for Parent Company?

Question for you. Can I make accounting simpler since this is a disregarded entity by recording it as an expense in the parent company and not recording an investment into the subsidiary accounting records? Or is this a totaly wrong way to think?

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