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

Total prime cost, Interstate Manufacturing produces brass fasteners and in...

Interstate Manufacturing produces brass fasteners and incurred the following costs for the year just ended: Materials and supplies used Brass

Expense recognition, Purchases office supplies on account costing $12,600 d...

Purchases office supplies on account costing $12,600 during July. It pays $5,500 for these purchases during July and the remainder during August. Office supplies on hand on July 1

Corporation accounting oversight board, PCAOB - Public Corporation Accounti...

PCAOB - Public Corporation Accounting Oversight Board, a private-sector, non-profit corporation created by Sarbanes-Oxley Act of 2002, to oversee AUDITORs of public companies in or

Calculate the standard deviation of ibm and att, Question: ...

Question: State of the Economy Probability of state occurring IBM Return (%) ATT Return (%)

Amortization of patents for year 2010, Ely purchased a patent (with a remai...

Ely purchased a patent (with a remaining legal life of ten years) from Backo on January 1, 2010 for $300,000. Ely expected to use the patent for five years. The carrying value on B

Incomplete Records, Statement to ascertain profit in analysis method and co...

Statement to ascertain profit in analysis method and comparison method, and reconstructed using ledger

Income statement-group accounts, Normal 0 false false false...

Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4

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