9.1 lLecture_21_Sept_Consolidation_at_the_Date_of_Acquisition

9.1 lLecture_21_Sept_Consolidation_at_the_Date_of_Acquisition

Info iconThis preview shows pages 1–11. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ACIS 211 Company Accounting 2009 Consolidation at the Date of Acquisition Bill Foster Room 619 bill.foster@canterbury.ac.nz Tutorial exercises: week commencing 28 September part 1 Date of acquisition problem #1 In your own time: week commencing 28 September part 1 Date of acquisition problem #2 Date of acquisition problem #3 (be sure to work this one) Overview I. Income tax considerations II. Subsidiaries III. Control IV. Preparation of a Consolidated Balance Sheet worksheet full ownership purchased at book value V. Preparation of a Consolidated Balance Sheet worksheet full ownership purchased at more than book value VI. Preparation of a Consolidated Balance Sheet worksheet full ownership purchased at more than book value plus goodwill VII. Preparation of a Consolidated Balance Sheet worksheet less than full ownership purchased at book value VIII. Preparation of a Consolidated Balance Sheet worksheet less than full ownership purchased at more than book value plus goodwill IX. Full Fair Value Reading NZ IAS 27 Deegan & Samkin Chapter 24 Deegan & Samkin Chapter 26 Alfredson Chapter 20 Alfredson Chapter 22 I. Income tax considerations In order to facilitate a better understanding of the process of consolidation, we will ignore income tax effects II. Subsidiaries NZ IAS 27.12 requires all subsidiaries of a parent to be included in consolidated financial statements A subsidiary is an entity, including an unincorporated entity such as a partnership, that is controlled by another entity (known as the parent) NZ IAS 27.4 III. Control Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities NZ IAS 27.4 The power to govern exists where one entity is able to select and terminate those parties responsible for determining the financial and operating policies of another entity Power arises either from legislation (public sector entities) or from holding a majority interest in the voting rights of an entity The power to govern cannot be shared or exercised jointly by two or more partners or co-owners The power to govern rests with the party having the ultimate decision-making capacity, regardless of whether or not that power is actively exercised Control is presumed to exist when the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity unless, in exceptional circumstances, it can be clearly demonstrated that such ownership does not constitute control NZ IAS 27.13 Control also exists when the parent owns half or less of the voting power of an entity when there is (a) power over more than half of the voting rights by virtue of an agreement with other investors (b) power to govern the financial and operating policies of the entity under a statute or an agreement (c) power to appoint or remove the majority of the members of the board of directors or equivalent governing body and control of the entity is by that board or body, or...
View Full Document

This note was uploaded on 12/23/2009 for the course BCOM ACIS 211 taught by Professor Susanwild during the Spring '09 term at Canterbury.

Page1 / 68

9.1 lLecture_21_Sept_Consolidation_at_the_Date_of_Acquisition

This preview shows document pages 1 - 11. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online