Parhold plc has bought for cash of £12 million all the voting shares of Subsid plc, whose net assets have been valued at £10 million. Describe how this transaction would affect:

a. The statement of financial position of Parhold plc; and

b. The statement of financial position of Parhold Group, given that Subsid plc is the only subsidiary. You need only describe the effects on these statements of financial position on the date of acquisition of Subsid’s shares.