Inter company balances-group accounts, Financial Accounting

Inter Company balances

One of the companies may appear as receivable (debtor) or payable (creditor) in the other company’s books. Just like in accounting four branches, such inter-company balances should be excluded from the consolidated balance sheet.

The following situations may therefore apply:

a) If the inter-company balances are directly opposite and equal ie a receivable in one companies books is the same as the payable in the other company books and these amounts are included in the receivables and payables of the group.

DR.  Group accounts payables
       CR. Group accounts receivable

(with the full amount due from one company to the other)

If the amounts due from one to the other are shown as separate amounts referred to as current accounts then the amounts or balances are simply ignored and not included in the consolidated balance sheet.

b) If the inter-company balances are directly opposite but not equal then the first step will be: To make them equal by adjusting the holding companys balances.

Posted Date: 12/12/2012 2:57:49 AM | Location : United States







Related Discussions:- Inter company balances-group accounts, Assignment Help, Ask Question on Inter company balances-group accounts, Get Answer, Expert's Help, Inter company balances-group accounts Discussions

Write discussion on Inter company balances-group accounts
Your posts are moderated
Related Questions
Moore Corportation follows a policy of a 10% depreciation charge per year on all machinery and a 5% depreciation charge per year on buildings (the corportation uses the nearest ful

GOODS AT BRANCH MARKED DOWN, OR MARKED UP BY AN ADDITIONAL AMOUNT If goods at the branch are not selling well, branch could be authorized by the Head office to mark-down the good

Q. Evaluate Equivalent annual cost? There are a number of techniques to answering this question and two are presented. The first difficulty is in deciding which broad approach

Calculate the Net Present Value of the Investment XYZ Ltd is a manufacturer of household goods located in Ang Mo Ko. They presently make and wholesale fruit juicers, blenders

RSC Designs quarterly selling and distribution expenses are $100,000 including ($10,000 depreciation), and are expected to be paid in the quarter incurred. Quarterly administrat

Americans With Disabilities Act - ADA  legislation passed in 1990 that bans discrimination against people who are having disabilities. According to this Act, discrimination against

explain the terms recording,classifying,summarizing and communicating

Calculation of Profitability ratios  -                     2008 2009 2010 G Net Sal

Archer Daniels Midland Company is considering buying a new farm that it plans to operate for 10 years. The farm will require an initial investment of $12.00 million. This investm

Greek Debt Exchange On the evening of February 20, 2012 private institutional investors, representatives of the IMF, ECB, and European governments agreed to a major "intervention"