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consolidation

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › consolidation

  • This topic has 5 replies, 2 voices, and was last updated 10 years ago by John Moffat.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • December 26, 2014 at 1:05 pm #221644
    amna
    Participant
    • Topics: 92
    • Replies: 93
    • ☆☆

    will a current account balance between the parent and subsidiary have an effect on the receivables apart from a sale made by parent to subsidiary in a consolidated statement of financial position?

    question number 38 on open tuition revision mock paper(cbe)

    December 26, 2014 at 4:17 pm #221664
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54720
    • ☆☆☆☆☆

    The current account balance reduces the total receivables and reduces the total payables in the consolidated statement of financial position.

    December 27, 2014 at 3:59 am #221671
    amna
    Participant
    • Topics: 92
    • Replies: 93
    • ☆☆

    ok.thanks alot sir, but can i know what does the current account balance in this situation includes?

    December 27, 2014 at 12:18 pm #221682
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54720
    • ☆☆☆☆☆

    The current account is the money owing from one of the companies to the other company.

    So one company will have it as a receivable and the other company will have it as a payable.

    When we consolidate we only want to show receivables and payables outside the group, and so the current accounts disappear.

    December 27, 2014 at 3:39 pm #221689
    amna
    Participant
    • Topics: 92
    • Replies: 93
    • ☆☆

    ok.sir i understood it really well.thanks alot

    December 27, 2014 at 4:25 pm #221694
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54720
    • ☆☆☆☆☆

    You are welcome 🙂

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