Study Corporate Reporting: Group Accounting

Showing posts with label Group Accounting. Show all posts

CONSOLIDATION EXEMPTION FOR A PARENT COMPANY

2 July 2011

There are certain situations in which a parent company may not wish to consolidate a subsidiary. In this article, we are going to discuss why a parent company may wish to do so, and the circumstances in which the non-consolidation of subsidiaries is permitted by International Accounting Standards.

CALCULATING PURCHASED GOODWILL: PART 3

27 May 2011

Following from Part 2 of this article, we are now going to discuss the various forms of cost of investment that a parent company can make when acquiring a subsidiary. For the purposes of goodwill calculation, the cost of investment must be their fair values at the date of acquisition.

ACCOUNTING FOR NEGATIVE GOODWILL

26 May 2011

Negative goodwill arises where the cost of investment in a subsidiary is lower than the acquired fair value of that subsidiary's net assets. Put simply, the parent company has purchased a subsidiary at a discounted price.

CALCULATING PURCHASED GOODWILL: PART 2

Continuing from Part 1 of this article, we are now going to look at some illustrations on how to calculate purchased goodwill using the proportion of net assets method and the full goodwill method.

CALCULATING PURCHASED GOODWILL: PART 1

25 May 2011

Purchased goodwill may arise on a business combination, i.e. when a parent company acquires a subsidiary. It is simply the difference between the cost of investment paid and the fair value of the subsidiary's net assets at the date of acquisition. In other words, it is the difference between what you pay and what you get.

Back to TOP

CONSOLIDATION EXEMPTION FOR A PARENT COMPANY