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Hi,
With regards to group consolidation and dates, this is something that I’ve found myself getting confused about, so I just wanted to get clarification:
Scenario:
A obtains 60% of C on 1.2.X5. C obtained 53% of D on 1.4.X2. A obtains 70% of E on 1.6.X6.
A’s works to a year end of 31.12.
What date would A consolidate each of the companies from.I understand that if a company obtains a existing group, so from the scenario C and D, that it will consolidate at the date it obtains the parent in the scenario, being C. However, it always confuses me as at what date consolidation, especially for SOFP and SPL would be carried out.
In the above scenario, would A consolidate as of 1.2.X5, or as of 31.12.X5 (year end), for both C/D. Also in relation to E, would A consolidate as of 1.6.X6 or 31.12.X6 (year end).I’ve probably missed something very basic, so forgive me if i have, but also thanks in advanced!
RT
Hi,
We consolidate from the date we obtain control.
So A gains control of E on 1.6.X6 and so we consolidate from that date. In the SFP we would need the retained earnings at that date to work out the net assets and in profit and loss we would consolidate the results from that date too, so 7 months from 1.6.X6 to 31.12.X6
A obtains control of C on 1.2.X5 so would consolidate from that date, again we would need the retained earnings at that date and the results in profit and loss would include 11 months to 31.12.X5.
On the day A obtains control of C, it also obtains control of D, so A would consolidated D from that date too. Again it would need the net assets of D at that date and we would include the 11 months in profit and loss up to 31.12.X5.
For both C and D we would then consolidate a full 12 months to 31.12.X6 as we have had control for the full year.
Hope that helps clear it up a bit.
Thanks
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