Advanced financial accounting - Lecture 37: Group accounts. The main topics covered in this chapter include: control; consolidated accounts; consolidated balance-sheet; consolidated income statement; owner’s equity; current liabilities; current assets;... Please refer to the lecture for details!
Trang 1Advanced Financial
Accounting
Lec-37
Trang 2Group Accounts
Trang 3Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
Trang 41 The parent company has owned more than 50% of
subsidiary company (Each ordinary share capital has one voting right)
2 The parent company has power over more than 50% of
the voting rights of subsidiary company by virtue of
agreement with other shareholders of it
3 The parent company has power to govern the financial
and operating policies of subsidiary company by statute
or under an agreement
4 The parent company has power to appoint or remove a
majority of the directors of subsidiary company
5 The parent company has power to cast the majority of
votes at meetings of the board of directors of subsidiary company
Trang 5Consolidated Accounts
1 Consolidated balance-sheet.
2 Consolidated income statement.
Trang 6Assets = Owner’s equity + Liabilities
Trang 7Owner’s Equity
1 Share capital
2 Reserves
Trang 81 Current assets
2 Non current assets
Trang 91 Current liabilities
2 Non current liabilities
Trang 10Question
P (Rs) S (Rs)
1,000
400
Total Assets
1,900
600
1,200
300
Current liabilities 200 100
Total liabilities & capital 1,900 600
Balance sheet
As on 31 Dec 2008
Trang 11Question
The parent Co (P) acquired 100% shares of the subsidiary Co (S) on 31st December 2008.
Required: Prepare the Consolidated Balance Sheet as on the same date.
Trang 12Consolidated Balance Sheet
As at December 2008
(Rs)
Fixed assets 1,400
Current assets 600
Current liabilities 300
Trang 13Balance Sheet
As on 31st December 2008
P (Rs) S (Rs)
Fixed assets 1,000 400 Investment in S 500 current assets 400 200
Total Assets 1,900 600
Share capital 1,200 300 Reserves 500 150
Current liabilities 200 150
Total liabilities & capital 1,900 600
The parent Co (P) acquired 100% shares of the subsidiary Co (S) on 31st December 2008.
Required: Prepare the Consolidated Balance Sheet as on the same date.
Question
Trang 14Solution
Consolidated Balance Sheet
As at December 2008
(Rs)
Fixed assets 1,400
Goodwill 50
Current Assets 600
Share capital 1,200
Reserves 500
Current liabilities 350
Total liabilities &
capital 2,050
Trang 15Net assets of S Co