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Advanced Financial Accounting

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Advance Financial Accounting (FIN-611)
VU
LESSON # 45
GROUP ACCOUNTS
Comprehensive Workings in Group Accounts
Consolidated Balance Sheet
W-
1
Number of ordinary shares of S Co
acquired by P Co
x 100 = %
H%
Total number of ordinary shares in S Co
100 - H% =
MI%
MI%
W-
2
Analysis of equity of S Co for pre and
post acquisition
Post-
Pre-acquisition
acquisition
All
Nil
Ordinary share capital
on the date of
after the date
acquisition
of acquisition
Reserves
All
Nil
Fair value adjustment
Total
H% of total
Parent's share
Parent's share
Minority's
MI% of total
Minority's share
share
W-
3
Calculation of
Goodwill
Rs.
Costo fo investment in S Co's ordinary
shares
*****
less Dividend received out of the
*****
237
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Advance Financial Accounting (FIN-611)
VU
preacquisition profits
*****
Pre-acquistion fair value of net assets (owners' equity) of S Co
x H%
*****
Goodwill
*****
less Impairment
loss
(****)
Goodwill to be presented in consolidated balance sheet
*****
W-
4
Calculation of Group
Reserves
Reserves of Parent Co
All
add Post acquisition equity of S Co to the extent of H%
*****
less Un-realized profit (if intra group sale
from P to S)
(All)
less Un-realized profit (if intra group sale from S to P) to the
extent of H%
(****)
less depreciation effect on fair vale adjustment to the extent of
H%
(****)
less impairment loss of
goodwill
(****)
*****
W-
5
Calculation of
Minority Interest
Owners' equity of S Co
All
add Fair value Adjustment
All
less URP (incase of intra group sale from S
to P)
(All)
less Depreciation effect on fair value
adjustment
(All)
Total value
Total
Minority
Interest =
Total x MI%
Calculations specific to the
scenario
238
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Advance Financial Accounting (FIN-611)
VU
Scenario
Action
1
Intra group loans
To be cancelled
To be cancelled and
balance if any to be shown
Intra group current
2
as goods in transit or cash
accounts
in transit, as the case may
be.
To be cancelled to the
extent of H%, the balance
Intra group
3
to be shown in the
dividend
consolidated balance sheet
as payable to Minority
To be added in the group
4
Negative goodwill
reserve
Reserves as on the
opening date of the year in
which the S Co was
During the year acquisition of S Co
acquired + profit for the
5
and calculation fo pre acquisition
year in which the S Co
reserves
was acuired to the extend
of the number of months
remained in the group's
acquisition
Consolidated Income Statement
W-
1
Calculation of opening balance of group's
retained profits
Opening balance of Retained profits of P Co
All
add Post acquisition opening balance of retained profits of S
Co x H%
*****
less Goodwill imapirment
loss
(****)
*****
W-
2
Calculation of
Minority Interest
Profit after tax of S Co.
*****
less Un-realized profit (if intra group sales
from S to P)
(****)
Net/Total
*****
239
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Advance Financial Accounting (FIN-611)
VU
Net/Total amount x MI% =
Minority Interest
Calculations specific to the
scenario
To be cancelled. TIP: All amount
of dividend paid by the S Co will
Intra group
be eliminated only the amount of
1
dividend
dividend paid by the P Co will
appear  in  the  Consolidated
Income Statement
Deduct the same amount from the
sales and also from the cost of
2
Intra group trading
goods sold in the consolidated
income statement
Add in the cosolidated cost of
goods sold and subtract from the
profit after tax of S Co before
applying  MI%  to
calculate
3
Unrealized profits
Minority interest (only when the
intra group trading is from S to P)
If it is intra group trading from P
to S then do nothin for Minority
Interest calculation
240
Table of Contents:
  1. ACCOUNTING FOR INCOMPLETE RECORDS
  2. PRACTICING ACCOUNTING FOR INCOMPLETE RECORDS
  3. CONVERSION OF SINGLE ENTRY IN DOUBLE ENTRY ACCOUNTING SYSTEM
  4. SINGLE ENTRY CALCULATION OF MISSING INFORMATION
  5. SINGLE ENTRY CALCULATION OF MARKUP AND MARGIN
  6. ACCOUNTING SYSTEM IN NON-PROFIT ORGANIZATIONS
  7. NON-PROFIT ORGANIZATIONS
  8. PREPARATION OF FINANCIAL STATEMENTS OF NON-PROFIT ORGANIZATIONS FROM INCOMPLETE RECORDS
  9. DEPARTMENTAL ACCOUNTS 1
  10. DEPARTMENTAL ACCOUNTS 2
  11. BRANCH ACCOUNTING SYSTEMS
  12. BRANCH ACCOUNTING
  13. BRANCH ACCOUNTING - STOCK AND DEBTOR SYSTEM
  14. STOCK AND DEBTORS SYSTEM
  15. INDEPENDENT BRANCH
  16. BRANCH ACCOUNTING 1
  17. BRANCH ACCOUNTING 2
  18. ESSENTIALS OF PARTNERSHIP
  19. Partnership Accounts Changes in partnership firm
  20. COMPANY ACCOUNTS 1
  21. COMPANY ACCOUNTS 2
  22. Problems Solving
  23. COMPANY ACCOUNTS
  24. RETURNS ON FINANCIAL SOURCES
  25. IASBíS FRAMEWORK
  26. ELEMENTS OF FINANCIAL STATEMENTS
  27. EVENTS AFTER THE BALANCE SHEET DATE
  28. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
  29. ACCOUNTING POLICIES, CHANGES IN ACCOUNTING ESTIMATES AND ERRORS 1
  30. ACCOUNTING POLICIES, CHANGES IN ACCOUNTING ESTIMATES AND ERRORS 2
  31. BORROWING COST
  32. EXCESS OF THE CARRYING AMOUNT OF THE QUALIFYING ASSET OVER RECOVERABLE AMOUNT
  33. EARNINGS PER SHARE
  34. Earnings per Share
  35. DILUTED EARNINGS PER SHARE
  36. GROUP ACCOUNTS
  37. Pre-acquisition Reserves
  38. GROUP ACCOUNTS: Minority Interest
  39. GROUP ACCOUNTS: Inter Company Trading (P to S)
  40. GROUP ACCOUNTS: Fair Value Adjustments
  41. GROUP ACCOUNTS: Pre-acquistion Profits, Dividends
  42. GROUP ACCOUNTS: Profit & Loss
  43. GROUP ACCOUNTS: Minority Interest, Inter Co.
  44. GROUP ACCOUNTS: Inter Co. Trading (when there is unrealized profit)
  45. Comprehensive Workings in Group Accounts Consolidated Balance Sheet