Consolidating unit investment trust Slutty web chat

Let’s be more practical today and learn some advanced accounting techniques.

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If you’d like to revise a theory first, then please read my summary of IFRS 3 Business Combinations and IFRS 10 Consolidated Financial Statements, both of them contain video in the end.

Here’s the question: Mommy Corp has owned 80% shares of Baby Ltd since Baby’s incorporation.

Below there are statements of financial positions of both Mommy and Baby at 31 December 20X4.

Prepare consolidated statement of financial position of Mommy Group as at 31 December 20X4.

Measure NCI at its proportionate share of Baby’s net assets.

Please note here that in the above statements of financial position, .I use it this way because for me it’s easier to verify and identify mistakes, but it’s up to you.I have described the consolidation procedures and their 3-step process in my previous article with the summary of IFRS 10 Consolidated financial statements, but let me repeat it here and follow these steps: After you make sure that all subsidiary’s assets and liabilities are stated at fair values and all the other conditions are met, you can combine, or add up like items.It’s very easy when a parent (Mommy) and a subsidiary (Baby) use the same format of the statement of financial position – you just add Mommy’s PPE and Baby’s PPE, Mommy’s cash and Baby’s cash balance, etc.In reality, companies use their own format for presenting their financial position and therefore it can be difficult to combine.That’s exactly WHY so many groups use their “” and subsidiaries’ accountants must fill them up along with preparing own financial statements.

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