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Example
A was incorporated on 1 January 20X5. On 1 January 20X7 it acquired 100% of the ordinary shares in B which was incorporated on that day. Two years later, on 31 December 20X9, the balance sheet of the two companies were as follow.
Prepare a consolidated balance sheet at 31 December 20X9 for A and its subsidiary.
Solution
- Non-current assets: $10,000 + $5,000 = $15,000
- Net current assets: $5,000 + $3,000 = $8,000
- Share capital: $10,000. The $5,000 investment in B appearing in the A balance sheet is cancelled by the $5,000 share capital in the balance sheet of A.
- Accumulated profits: $10,000 + $3,000 = $13,000.
Related posts:
How do you do a normal consolidated balance sheet for group accounts when there are have been no new acquisitions/disposals?
For e.g. a holding company needs to prepare consolidated accounts for its subsidiaries.
What are the double entries you have to post for the consolidation adjustments?
Thanks
Thanks for your reply.
Could you give us an exact example? For that the “consolidation” is a big knowledge point.
Thanks!
I have purchased that advertised bookset. Just to know more about consolidation. There is no heading about consolidation and so far I couldn’t find anything about it and most of them are all basic accounting matters.
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