Gladly. If I bought XYZ stock within my corporation, the corp. would book the purchase at it's cost of .06. That cost would remain on the books even though the FMV is $12. This is GAAP, generally accepted accounting principles. The corp. must use cost, not FMV.
For example, if the only asset in my corporation was 100,000 shares of XYZ and it had no debt, the book value of its assets would be $6,000 (100,000 sh @ .06). But the fair market value of the corp. would be $1,200,000 (100,000 sh @ $12).
On the FS my shareholder's equity would be $6,000 since it has no debt. Assets less Liabilities equals $6,000.
Now let's suppose this stock is a non-BK stock, that is clearly worth $12 per share. Suppose someone offered to buy my corp. My corp is worth $1.2 million at FMV. I could sell my corp. for that price, or my corp. could sell it's XYZ stock on the NYSE for $1.2 million, pay the corporate tax, and reinvest the funds in another venture.
Remember that the numbers you see on the 8K, etc. are at book value. The investment in the subs are at book value. We don't know what the subs are worth because the details are not reported to the SEC or detailed in the FS.
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