Unit 11 - Grp Rep - Consol Fin Stat

12 d consolidation procedures after acquisition in

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Unformatted text preview: ntrolling interests (a separate item in equity) according to their ownership respectively. 12 (d) Consolidation Procedures after Acquisition • In preparing consolidated financial statements for a group of companies, the financial statements of the parent and its subsidiaries are combined together on a line-by-line basis by adding like items of assets, liabilities, equity, expenses and income. Hence, the following steps should then be taken: – Adjust any errors or timing differences in intra-group transactions such as proposed dividends, goods/cash in transit etc., in parents / subsidiaries’ general ledgers; – Compute the goodwill on consolidation, non-controlling interests and consolidated retained profits; – Eliminate the subsidiary’s equities at acquisition date against the carrying amount of the parent’s investment and NCI; – Eliminate all intra-group balances and transactions, including income, expenses, any related unrealised profits etc.; – Account for non-controlling interests as a separate item in equity; – Ad...
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This document was uploaded on 04/03/2014.

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