Preparing Consolidated Financial Statements
A very important topic in accounting and finance especially for those working for a group of companies. This topic is discussed and explained according to the international financial reporting standards (IFRS)
Course Outline
Good to know
- What consolidated financial statements are
- Why we need to prepare consolidated financial statements
- Companies that must prepare consolidated Financial Statements
- When the parent is exempted from preparing consolidated financial statements
- How investment in subsidiaries is measured in the separate financial statements
- What the acquisition method is and when we use it
- What the equity method is and when we use it
Control
- What is meant by control
- What are the indicators of control
- How do we deal with restricted control/temporary control ?
Non-controlling interest (NCI)
- Definition
- Measurement (using both proportional method and fair value method)
How to calculate consideration cost when consideration is:
- Cash Only
- Cash AND/OR Shares issued
- Deferred Consideration
- Contingent Consideration
Goodwill
- What is goodwill
- How is Goodwill calculated
- When do we gross up goodwill
- How to treat goodwill impairment
Consolidation Process
- Consolidation adjustments (Goodwill, Non Controlling Interests, Consolidated Reserves)
- Fair value adjustments for subsidiaries
- Other Adjustments (Intragroup balances, unrealized profit, Inventory, sale of non-current assets, etc..)
- Inta-group transactions and items (Intra group items, Interest, dividends, etc…)
- Deferred Tax Treatment
- Contingent Liabilities
- Combined Financials
- Eliminating entries
How to prepare
- Consolidated Statement of Financial Position
- Consolidated Statement of Other Comprehensive Income
- Consolidated Statement of Changes in Equity