Questions on distribution in specie accounting treatment

Hi guys,

Need some help on accounting treatment for dividend in specie on both separate parent statement and consolidated statement

Let's say I have a set of shareholders, S who owns company X that has a subsidiary M and other subsidiaries. X wants to distribute M to S.

Questions: 1) What entries do I need to adjust and balance out in (a) parent financial statement X HoldingCo, and (b) consolidate statement X Consol? 2) Can dividend in specie be done at cost? i.e. not at fair value and very likely the cost is below book value. If it is allowed, what would be the difference (cost vs. fair value) in term of accounting entries in both 1(a) and 1(b)? 3) Do you know any good accounting book (US or non-US) that deals a lot on change in group structure, especially on disposal?

What I have right now (please advise): 1) (a) At parent's, i just need to reduce "Investment in subs" by the cost of acquiring M. To balance out, my retained earnings reduces by the same amount. (b) Not sure. Do I have to fair value the amount to be distributed? How will this impact my answer in (a)? Distribution in specie is a form of "disposal" where I have to recognise gain/loss on disposal, right?

2) If at cost and below book value/carrying value, I have to recognise a loss right? Or, it is illegal to even do it at cost?

Context: I have a non-finance/accounting background and working in some corp fin of a small co. Pardon if the question sounds basic... Let me know if you need further info.

Many thanks for spending some time on this.