Preparation of the Consolidated Statement of Financial Position part 1

ACCA F7 lectures  Download F7 notes

Preparation of the Consolidated Statement of Financial Position

• Consolidation is the process of adjusting and combining financial information from the individual financial statements of a parent undertaking and its subsidiary undertakings to prepare consolidated financial statements that present financial information for the group as a single economic entity.

• the Consolidated Statement of Financial Position reflects the assets and liabilities within the control of the parent entity, and how they are owned.

• defined by IAS 27 Consolidated Financial Statements and Accounting for Investments in Subsidiaries, consolidated financial statements are “the financial statements of a group presented as those of a single entity”.


  1. Profile photo of charlottemaomao says

    I cannot watch the video lecture here in China..Probably because they are blocked by the Great Fire Wall. So sad

    Are those videos from YouTube? If they are, all the blockage makes sense.

    Really miss those days when I spend months with OT..

  2. Profile photo of MayLynn says

    Hi,Hv a nice Day!Teacher Mike.Can you help me explain?Two methods hv calculation goodwill in Consolidated Statement of Financial Position.I wanna clearly to know differences of two method(Net assets method & Fair value method).I don’t clear working 2.Hesitated that step.
    Hoping …Your kindly reply Teacher Mike!

    • Profile photo of MikeLittle says

      There really isn’t any difference except in the value attributable to the nci

      If they’re valued on a proportional basis, they are valued as their percentage share of the fair valued net assets.

      If they’re valued on a full fair value basis then the course notes – free on this sit – clearly illustrate the three differe nt ways in which the examiner can give you information to arrive at the nci value


  3. Profile photo of francis7 says

    Thanks Sir this lecture is helpin me out…. how to answer exam question on F7 as its my 1st time, do one have to do the woorkings at the back of the answer sheet and later answer the questions at the front of the answer sheet?

    • Profile photo of MikeLittle says

      Too late to help francis, sorry Francis – you should have put your question on the Ask the Tutor page!

      However, for any others reading this thread, no! Do your workings first and then write out your answer behind the workings. Always remember, these markers are not idiots! They also have done ACCA exams and know the issues facing students.

      The positioning of your workings relative to the “answer” is totally immaterial (other than having all your workings together and not spread throughout the answer booklet. I’ve actually seen that done on two occasions whilst I was an ACCA marker)

      • Profile photo of allenmendonca says

        Suppose i leave one page for my workings and keep getting back to it later and i don’t use up the entire space, can i just mention at the end answer starts on the next page or something like that?

      • Profile photo of MikeLittle says

        Absolutely no need at all to do that. It doesn’t matter to ACCA, the examiner or a marker (the only one to complain is the tree that gave up its life to make the paper that you are now only half using)

        You write as much or as little as you want on a page.

        Just don’t make your workings crunched up – leave plenty of space and head them properly and set them out neatly and logically

        It all comes with practice

    • Profile photo of MikeLittle says

      Are you following the lecture at all? I clearly say “Look at the example Rasa and Tatjana” Do you have the course notes in front of you? Then look on page 33 and …..Lo!!!!! There is an example called Rasa and Tatjana!

      • Profile photo of maat9 says

        hello sir i have passed f7 with 60% marks ,due to your effort , you have the main role in my success thank you very much sir..

      • Profile photo of MikeLittle says

        Hi, you are very kind but there was quite a bit of input from you too! It wasn’t me sitting in that exam room – that was you.

        Anyway, well done to both of us! :-)

  4. avatar says

    When working out the full 25 mark SFP question you might have to work for Unrealised profit to work out the Net Assets of the subsidiary, do you then make that Working 2 or the Arrangement of which is 1st and subsequent workings is not that important?

    • Profile photo of MikeLittle says

      I must have said it many times in the recordings – at least I think I have – after working W2 Goodwill, we have to do calculations for pups (pretty well every exam question) and dividends (very rarely)

      Then we are in the position where we can do working W3 Consolidated Retained Earnings (or Cons Ret Ears as I write it on the screen)

  5. avatar says

    Please help me am using an apple iPad and when I want to watch the lectures the video does not come out and ave tried the support page nnothing seem to help the browser am using is safari,what cud be the problem it only the page with comment which show and tithe video does moot appear at all.thank you in advance

    • Profile photo of MikeLittle says

      Look at a marking scheme – there are no marks allocated to writing:

      The Warrburt Group
      Consolidated Statement of Financial Position
      as at 30 September 2013

      but, if you don’t believe me …. that’s ok – write it out in full


  6. avatar says

    Hi Mr. Little. I observed that in the first example you included the investment of 3000 (cost of acquiring the subsidiary) in the Balance Sheet but in this lecture, you did not include the 18,000 investment in the Balance Sheet. Why is that so?

    • Profile photo of MikeLittle says

      That first example is to show the effect of acquiring a subsidiary in the acquirer’s records. It’s the only example where the answer does NOT ask for a consolidated position. All subsequent examples ask for consolidated statement of financial position

      • Profile photo of MikeLittle says

        OK but …… may I suggest that, if you had listened carefully to the lecture, you would have understood and then there would have been no need to ask.

        However, it’s always nice to hear from students and we’re all of us very happy to respond when requested to

  7. Profile photo of darren says

    hi – i have only 4 exams left to take of which if F7. i just passed P1 and P3 but previous to this i left 5 yr gap in my studying. im nervous about F7 and P2 as i cant remember alot of the double entry stuff- can you point me to where i can smash through some double entry practice questions prior to beginning my course in Sept.

    Your help here would be greatly appreciated. Open tuition really helped me with P3 last yr – really good mateial and i will defo be using again for my remaining exams.

  8. avatar says

    I will suggest that the teacher who is teaching F3 and cover Consolidated SFP is the best teacher to teach F7 as well ,….and also if all of you watch F3 concern lecture on Consolidated SFP and IS will be hlep ful to understand him ….:)

    • Profile photo of MikeLittle says

      Thank you for the suggestion Amin – I’ll forward your thoughts to John who teaches F3. Maybe he’ll want to cover P2 as well. I’ll put it to him and, if his reply is printable, I’ll post it on the site :-)

      • Profile photo of latoyah says

        Love you Mike, but i’m use to John on my computation lectures (F5 and F9). was looking forward for you on the Audit paper (f8) and him on this one.
        Mike i really wish you were on f8 to make it more lively.
        Looking forward to the rest of the F7 lectures.

  9. Profile photo of sab says

    So we could really use abbreviations during exam?..
    That would be really time efficient. because I am slow writer.
    and we dont need to beautify the paper with black underlines dont we …. no… ts time consumng

  10. avatar says

    Goodness me… this tutor is so funny! Classic school master irony… I’ve already completed my studies for F7 but that was two years ago and it is great to be able to go back over that which was learnt back then

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