Consolidating subsidiaries with different year ends Nasty sex chat st paul
This article will not go into the detail of preparing consolidated financial statements because the principles involved are largely the same as under previous UK GAAP.
For example, the requirement to eliminate intra-group trading is still the same and the consolidation of a subsidiary is required when the parent company controls the operating and financial policies of the entity (which is often achieved with an ownership interest of more than 50% of the net assets).
Consolidated financial statements make the financial statements of the parent company and its subsidiaries appear like those of a single entity.
Other issues relating to group accounts which remain the same under FRS 102 are as follows: Areas that have been subject to significant change relate to when a parent acquires further shares in a subsidiary and, conversely, when a parent disposes of some of its ownership interest in a subsidiary, but still retains control following the disposal.
It is a common scenario in a group context where a parent company has previously acquired a controlling stake in a subsidiary (for example the parent may already own, say, 70% of the subsidiary), but then acquires further ownership interest in the subsidiary.
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.
Below there are statements of financial positions of both Mommy and Baby at 31 December 20X4.