Steps in preparing the consolidated balance sheet, Financial Accounting

Assignment Help:

Steps in preparing the consolidated balance sheet

Step 1:

Prepare the 3 important accounts i.e.

  • cost of control to determine goodwill
  • Group retained profits
  • Minority interest

 

Step 2:

Add the assets and liabilities of the subsidiary company to those of the holding company noting the following:

a) The investment in subsidiary company appearing in the holding company balance sheet will be excluded from the consolidated balance sheet and instead we will have goodwill on consolidation.

b) The ordinary share capital and preference share capital in consolidated balance sheet will only be that of the holding company. This is because the share capital of the holding company and the subsidiary is split between the cost of control (holding companies share) and the Minority interest.

c) The group retained profits will be the balance appearing in the group retained profits account and group capital reserves should also be completed the same way company group retained profits. (This means that group capital reserves will be made up of the holding company’s capital reserves plus holding companies share of post acquisition capital reserves in subsidiary).

d) The minority interest will be shown as part of shareholders funds in consolidated balance sheet but this is after getting the sub-total of the ordinary share capital, preference-share capital, group capital reserves and group retained profits.


Related Discussions:- Steps in preparing the consolidated balance sheet

RETAINED PROFITS BROUGHT FORWARD-group accounts, RETAINED PROFITS BROUGHT F...

RETAINED PROFITS BROUGHT FORWARD If we recall from the consolidated balance sheet, the group-retained profits should be made up of the holding companies retained profit plus the

Report on the management of foreign trade risks, Q. Report on the managemen...

Q. Report on the management of foreign trade risks? Your company is probable to face three types of risk in connection with its foreign trade. These are as: (1) Foreign exch

Uncertainty concerning the business, Uncertainty concerning the business ...

Uncertainty concerning the business It has been recognised in a variety of studies that the problem of adequately financing SMEs is a problem of uncertainty. A defining feature

Good will on consolidation-consolidated balance sheet, Good will on consoli...

Good will on consolidation Good will on consolidation arises when the purchase consideration paid by the holding company is different from the value of the net assets acquired i

State the term - regulations, State the term - Regulations Financial acc...

State the term - Regulations Financial accounting reports, for numerous businesses, are subject to accounting regulations which try to make sure they are produced with standard

Subsidiary companies-group accounts , SUBSIDIARY COMPANIES (1AS 27) A sub...

SUBSIDIARY COMPANIES (1AS 27) A subsidiary company is a company in which the investing company (also called holding or parent company) controls the financial and operating polici

Npv cash flow model, As discussed earlier, the base case public sector comp...

As discussed earlier, the base case public sector comparator (PSC) will be a benchmark for different project bidding proposals when choosing the preferred bidder to provide the bes

Final project, You own a two-bond portfolio. Each has a par value of $1,000...

You own a two-bond portfolio. Each has a par value of $1,000. Bond A matures in five years, has a coupon rate of 8 percent, and has an annual yield to maturity of 9.20 percent. Bon

How to determine the market economy, How to determine the market economy ...

How to determine the market economy Within a market economy there are strong competitive forces at work which ensure that failure to enhance owners' wealth won't be tolerated f

IAS 40, Hi I am doing my thesis on IAS 40 and I''m sort of stuck with find...

Hi I am doing my thesis on IAS 40 and I''m sort of stuck with finding information. I need to find positive and negative international critique on the standard

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd