Description
objective of the ppt is to formulate principle and procedures for preparation and presentation of consolidated financial statements.
Consolidated Financial Statement
Objective
To formulate principle and procedures for preparation and presentation of consolidated financial statements.
Scope
Applicable to following enterprises ? Group of enterprises under the control of parent ? Investments in subsidiaries Excluded cases ? Amalgamation ? Investment in associates ? Investment in joint ventures
Definitions
Parent An enterprise that has one or more subsidiaries Subsidiary An enterprise that is controlled by another enterprise (Parent) Group Parent and all its subsidiaries Consolidated Financial Statement Financial statement of a group presented as those of a single entity
Composition
Consolidated Balance Sheet ? Consolidated Profit and Loss statement ? Notes, additional statements and explanatory materials that outline an essential part thereof
?
Note The consolidated financial statements are presented, to the extent possible, in the same format adopted by the parent for its separate financial statements
Scope of Consolidated Financial Statements
?
The consolidated financial statements are compiled on the basis of financial statements of Parent and all enterprises that are controlled by Parent The consolidated financial statement of a Parent organization should encompass all the subsidiaries, both domestic and foreign companies
?
Scope of Consolidated Financial Statements
However, Parent shall not include its subsidiaries when ? Control is intended to be for a short term and the subsidiary is required with a view to its subsequent disposal in near future; or ? It operates under a severe long term restrictions, which significantly impair its ability to transfer funds to the parent
Consolidation Procedure
Basic Procedure The financial statements of Parent and subsidiaries should be combined on a line by line basis by grouping together the like items of assets, liabilities, income and expenses
Consolidation Procedure
The holding company should eliminate its cost of investment in each of its subsidiaries ? If cost of investment>holding’s share in equity-Godwill ? If cost of investment<holding’s share in equity-Capital Reserve
?
Consolidation Procedure
Minority interests in net income should be identified and adjusted against the income of the group in order to arrive at the net income attributable to the owners of the Parent ? Minority interests in net assets should be identified and presented in the consolidated balance sheet separately from liabilities and the equity of Parent’s shareholders
?
Disclosures
The consolidated financial statement should disclose by way of a note-all subsidiaries including the name, country of incorporation or residence, proportion of ownership interest ? Intragroup balances and transactions and resulting unrealized profits should be wholly discarded ? The financial statement used in the consolidation should be drawn up to the same reporting date
?
Disclosures
The consolidated financial statement should disclose the following wherever possible ? The nature of relationship between Parent and subsidiary ? The impact of the acquisition and disposal of subsidiaries on the financial position ? The names of the subsidiary of which reporting date is different from that of the Parent and the difference in reporting dates
Disclosures
?
Minority interests should be presented in the consolidated balance sheet separately from liabilities and the equity of Parent’s shareholders Consolidate financial statements should be prepared using uniform accounting policies
?
Thank You
doc_545724727.pptx
objective of the ppt is to formulate principle and procedures for preparation and presentation of consolidated financial statements.
Consolidated Financial Statement
Objective
To formulate principle and procedures for preparation and presentation of consolidated financial statements.
Scope
Applicable to following enterprises ? Group of enterprises under the control of parent ? Investments in subsidiaries Excluded cases ? Amalgamation ? Investment in associates ? Investment in joint ventures
Definitions
Parent An enterprise that has one or more subsidiaries Subsidiary An enterprise that is controlled by another enterprise (Parent) Group Parent and all its subsidiaries Consolidated Financial Statement Financial statement of a group presented as those of a single entity
Composition
Consolidated Balance Sheet ? Consolidated Profit and Loss statement ? Notes, additional statements and explanatory materials that outline an essential part thereof
?
Note The consolidated financial statements are presented, to the extent possible, in the same format adopted by the parent for its separate financial statements
Scope of Consolidated Financial Statements
?
The consolidated financial statements are compiled on the basis of financial statements of Parent and all enterprises that are controlled by Parent The consolidated financial statement of a Parent organization should encompass all the subsidiaries, both domestic and foreign companies
?
Scope of Consolidated Financial Statements
However, Parent shall not include its subsidiaries when ? Control is intended to be for a short term and the subsidiary is required with a view to its subsequent disposal in near future; or ? It operates under a severe long term restrictions, which significantly impair its ability to transfer funds to the parent
Consolidation Procedure
Basic Procedure The financial statements of Parent and subsidiaries should be combined on a line by line basis by grouping together the like items of assets, liabilities, income and expenses
Consolidation Procedure
The holding company should eliminate its cost of investment in each of its subsidiaries ? If cost of investment>holding’s share in equity-Godwill ? If cost of investment<holding’s share in equity-Capital Reserve
?
Consolidation Procedure
Minority interests in net income should be identified and adjusted against the income of the group in order to arrive at the net income attributable to the owners of the Parent ? Minority interests in net assets should be identified and presented in the consolidated balance sheet separately from liabilities and the equity of Parent’s shareholders
?
Disclosures
The consolidated financial statement should disclose by way of a note-all subsidiaries including the name, country of incorporation or residence, proportion of ownership interest ? Intragroup balances and transactions and resulting unrealized profits should be wholly discarded ? The financial statement used in the consolidation should be drawn up to the same reporting date
?
Disclosures
The consolidated financial statement should disclose the following wherever possible ? The nature of relationship between Parent and subsidiary ? The impact of the acquisition and disposal of subsidiaries on the financial position ? The names of the subsidiary of which reporting date is different from that of the Parent and the difference in reporting dates
Disclosures
?
Minority interests should be presented in the consolidated balance sheet separately from liabilities and the equity of Parent’s shareholders Consolidate financial statements should be prepared using uniform accounting policies
?
Thank You
doc_545724727.pptx