Consolidating balance sheet

08-Dec-2016 00:11

If you’d like to revise a theory first, then please read my summary of IFRS 3 Business Combinations and IFRS 10 Consolidated Financial Statements, both of them contain video in the end.

Here’s the question: Mommy Corp has owned 80% shares of Baby Ltd since Baby’s incorporation.

2nd step Add all the liabilities of subsidiary company with the liabilities of holding company.

But Share capital of subsidiary company in holding company will not shown in the consolidated balance sheet in the books of holding company.

After their acquisitions, these smaller companies, or subsidiaries, may have remained legally separate from the large corporation, or parent company.

5th Step Treatment of Pre – Acquisition of reserve and profit Pre – acquisition profit and reserve of subsidiary company will be shown as capital reserve in consolidated balance sheet but the value of minority interest’s profit or reserves deducts from it and add in minority interest value.

Total profit before acquisition of subsidiary company = XXXX Less share of minority interest - XXXX Value of profit X minority interest’s value of shares in subsidiary company / total share capital of subsidiary company.

Let’s be more practical today and learn some advanced accounting techniques.

After summaries of standards related to consolidation and group accounts, I’d like to show you how to prepare consolidated financial statements .

After their acquisitions, these smaller companies, or subsidiaries, may have remained legally separate from the large corporation, or parent company.

5th Step Treatment of Pre – Acquisition of reserve and profit Pre – acquisition profit and reserve of subsidiary company will be shown as capital reserve in consolidated balance sheet but the value of minority interest’s profit or reserves deducts from it and add in minority interest value.

Total profit before acquisition of subsidiary company = XXXX Less share of minority interest - XXXX Value of profit X minority interest’s value of shares in subsidiary company / total share capital of subsidiary company.

Let’s be more practical today and learn some advanced accounting techniques.

After summaries of standards related to consolidation and group accounts, I’d like to show you how to prepare consolidated financial statements .

Under Indian Company Act , there is no need to prepare combined or consolidated final accounts of holding and subsidiary company in the books of holding company but holding company attaches the copy of balance sheet , one copy of profit and loss account and one copy of audit report of subsidiary company with his final accounts .