9 - • Worksheet entries are made to eliminate reciprocal...

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Unrealized Gain or Loss Reported in two places on the financial statements Income Statement Other comprehensive income – separate section below net income Balance Sheet Accumulated other comprehensive income – separate section of stockholders’ equity Consolidated Subsidiaries Investor owns more than 50% of voting stock of investee Investor controls investee Investor is called the parent company Investee is called a subsidiary (sub) Financial statements of a parent and its subsidiaries are combined Consolidated as if one company Consolidated Worksheet Tool to combine parent and subsidiary financial statements at year-end Parent and subsidiary accounts are placed side-by-side in columns
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Unformatted text preview: • Worksheet entries are made to eliminate reciprocal accounts Parent’s investment and Sub’s equity Receivables and payables between parent and sub Goodwill and Minority Interest • Goodwill Recorded in consolidation process as an intangible asset Occurs when parent purchases sub for more than the fair value of its net assets • Minority Interest Recorded in consolidation process and can be included in liabilities Occurs when parent owns less than 100% of sub International Accounting • Most corporations operate in multiple countries Most use their own currency Several European countries use the euro...
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This note was uploaded on 06/14/2011 for the course ACCOUNTING 23020 taught by Professor Na during the Spring '11 term at Kent State.

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