Group SFP – Basic consolidation (revision) – ACCA Financial Reporting (FR)
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i have a question why dont we include steven share captial ?
i think its because when P takes over S, it already has entire control over S, and thus only P’s share is mentioned (since its the only company thats issuing post consolidation) to avoid double counting, but u can see that S’s equity figures are absorbed upto the percentage of stake to which they change post acq by P(umder retained earnings). Ig we would see abt calculating NCI regarding this later
Basically, the reason the share caputal of subsidiary is not shown separately in the consolidated financial statements of the entity is because it has already been capitalised as part of the goodwill calculation.The share capital and reserves of the subsidiary are cancelled with the parent’s account of investment in subsidiary just as any other balances arising between subsidiary and parent post acquisition such as loans from parent to subsidiary have to be adjusted in order to show the position of the entity as a whole in the consolidated financial statements of the entity.
Hie Narcis
Your question is not silly. Its a very important question
Its like when u are buying a second hand car which has a half tank of fuel, the cost of buying the car includes the fuel which was in the car. So, when the parent buys S, he buys together with the reserves that are owned by the subsidiary
I dont know if this is making any sense
Hi, my question may sound silly, but can you please expand on the subsidiary’s retained earnings on the moment of acquisition, being “consumed”. What exactly happens with those funds? Why do we consider them “consumed” within the consolidation of the assets and liabilities?
Many thanks.
Hie Narcis
Your question is not silly. Its a very important question
Its like when u are buying a second hand car which has a half tank of fuel, the cost of buying the car includes the fuel which was in the car. So, when the parent buys S, he buys together with the reserves that are owned by the subsidiary
I dont know if this is making any sense
Hello,
I am unable to download the lecture notes. “Can’t open file” pops up every time i try to download and open it.
Any changes in topic for the September session?
logged in as sneo.
Hello!
Is it possiabe that there are questions about preparation consolidated FS with group disposal in real exam? Or group disposal is tested only in stand-alone FR of Parent?
Thanks!
Hello,
When I did my exam last time disposal was part of the section c question in groups. They asked me to do all normal group calculations in part a and then in the same scenario in part b was a disposal question.