Consolidation of Accounts — OpenTuition Forums

EErnest10y ago

Hi Sir, Thanks for the great job you are doing. I have question to ask on consolidation. If P co owns 80% share in S co and S co in turn owns 60% share in A co. In consolidation of the account for P co, what accounts will be the basis? Will it be the individual accounts of P co, S co and A co OR it will be the individual account of P co on one hand and the consolidated account of S co on the other?

MikeLittleTutor10y ago#1

In the exam, we do the "one-stage" consolidation - that is we consolidate P with S and A But in practice, S too must prepare consolidated accounts for the S Group (S with A)

EErnest10y ago#2

So in consolidating P S A, do we treat A as Associate of P or as Subsidiary of P taking into account P do not directly own A?

MikeLittleTutor10y ago#3

This is NOT an F7 topic - it's P2! Briefly - it's a subsidiary - but I'm saying no more simply because it IS a P2 topic

EErnest10y ago#4

Ok Thanks very much.

MikeLittleTutor10y ago#5

You're welcome