Answer in Accounting for Pble #170848
Is it possible for a parent to sell its subsidiary without losing its control?
There may be circumstances when the disposal of a subsidiary should not be recognised as a sale. These circumstances typically relate to when the parent sells the subsidiary but retains a degree of continuing involvement such that risks and rewards of ownership and control have not been transferred. Examples of circumstances include
the seller has effective veto power over major contracts or customers;
the buyer or any successor has the ability to put (sell) the subsidiary back to the seller at other than fair value;
the seller can require the buyer or any successor owner to sell the subsidiary back to it at other than fair value;
the seller has significant voting power on the subsidiary’s board;