Consolidation

This topic has 3 replies, 2 voices, and was last updated 4 years ago by John Moffat.

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November 11, 2021 at 6:23 am #640398
James124
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“The process of consolidation results in a single separate legal entity”.
This statement is incorrect. Tutor can you please explain?
November 11, 2021 at 7:42 am #640408
John Moffat
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As I make very clear in the my free lectures, the only legal entities are the two separate companies.

Consolidated accounts are prepared to give better information to shareholders, but there is no actual consolidated company.
November 11, 2021 at 9:48 am #640415
James124
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Thank you tutor.

And tutor, items shown in SOFP are capital items. I did an mcq in BPP kit (35.10) which says this. Not considering here consolidation its generally.
Is it correct?
If I say that all capital items are shown in SOFP and all revenue items are shown in SOPL so Is it right? Please correct me if I am wrong.
Thank you.
November 11, 2021 at 3:56 pm #640433
John Moffat
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It is certainly true that capital expenditure appears in the SOFP and revenue expenditure appears in the SOPL.
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