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In group ac we add the assets and liability of parent and subsidiary co but why we didnt add the share capital and the share premium of both
The parent company controls the subsidiary, and it is therefore the shareholders of the parent company who control the assets and liabilities of the whole group. The bit of the subsidiary that is owned by other people is shown owing to them as the non-controlling interest.
It will help you to watch all of the free lectures on consolidations.
Thanks Sir
yeah sure sir i saw the video but Sir parent co control the subsidiary therefore it has also bought the shares of subsidiary So why cant we add both shares like assets because the subsidiary co shares include also the shares of parent co but parent shares include only its not that what the co bought from subsidiary.But the share capital and reserves of the subsidiary are equal to the net assets of the subsidiary!
We show all the assets and liabilities of the group, and who owns them – most are owned by the shareholders of the parent, what is owned by others is the NCI.
Not only is the way we do it sensible, but we have no choice – it is the accounting standards that determine the rules, and so that is the way that you have to learn 🙂
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