Consolidated Balance Sheets Group Accounts & Consolidated Balance Sheets

Consolidated Balance Sheets Group accounts are required when a company acquires another company. The first company is called the holding or parent company and it controls the latter company, which is called the subsidiary. Group accounts basically consist of a consolidated balance sheet, which is a balance sheet that shows the net assets that the Holding Company controls and the ownership of those assets. The Group’s Capital and Reserves consist of the holding company’s capital and reserve and the group share of post-acquisition retained reserves of the subsidiary company. It also consists of what is called Minority Interest. The Preparation of the Group’s Consolidated Balance Sheet Step 1 You must first make sure at what date the acquisition took place. The reason for this is to have a clear picture in your mind concerning the events that occurred at the acquisition date and those of which occurred since. Step 2 The next step is to find out whether other parties hold a minority interest of the subsidiary’s consolidated net assets. This is done by dividing the amount of shares acquired by the subsidiary’s total share capital. The percentage of minority interest should be noted down. Step 3 when separate calculations of post acquisition profits, goodwill or minority interest are needed rather than all of them, just take a look at the column of each category to find out how to calculate it. Going through the calculations in this manner ensures that the possibility of your errors is minimal, and if they do occur you can systematically find out where they did. 80% Total of Total Equity Read more: Chapter 27 Group Accounts & Consolidated Balance Sheets http://www.friendsmania.net/forum/acca-notes-acca-past-papers/101678.htm#ixzz1nNV1QNEh