Unformatted text preview: ed financial statements should appear with all assets & liabilities recorded at their current fair market values eliminating the old accumulated depreciation of the subsidiary as of the acquisition date and netting it out against the historical cost gives the appearance that the depreciable assets have been newly recorded at their fair value as of the acquisition date. 2-14 The Optional Accumulation Elimination Entry 2-15 Consolidated Balance Sheet, Date of Combination; 100% Acquisition at Book Value 2-16 Consolidated Net Income
+ Parent’s Income from its own operations
(excluding any investment income from consolidated sub.)
+ Net Income from each of the consolidated sub.
(adjusted for any differential write-off)
= CONSOLIDATED NET INCOME
• If all subsidiaries are wholly owned → all of the
consolidated net income accrues to the parent company.
• If one or more of the consolidated sub. is less than wholly
owned → a portion of the consolidated net income accrues
to the non-controlling shareholders.
2-17 Consolidated Net Income: Example
Push Corporation purchases all of t...
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