Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › consolidated finacial statement. chapter 23
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- December 10, 2017 at 11:20 am #422380
example 6
p has controlling interest in s
$ $
Receivables 50,000 30,000
Payables 35,000 40,000
Included in P’s receivables is $8,000 owing from S. S’s payables include the $8,000 owing to P.Calculate the total receivables and payables to be shown on the Consolidated Statement of
Financial Position as at 31 December 2010.
answer- receivables $50000+30000=$80000-$8000=$72000.
payables $35000+$40000=$$75000-$8000= $67000
sir, my question is, what happens to the $8000 that has been eliminated from the accounts? where does it go?December 10, 2017 at 7:51 pm #422445It doesn’t go anywhere!!!
The consolidated statements are simply to show the position as though it was one ‘big’ company (even though legally there are only the two separate companies).
So in the consolidated SOFP we only show receivables and creditors outside of the two companies – we don’t know anything owing from one of the companies to the other company.
Do watch my free lecture working through this example!
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