How to prepare standard workings for Consolidated Financial statements and journal entry?

 

Workings of Consolidated Financial statements

1. Group structure

                P Ltd

                                80% Share acquired by P ltd.

 

                Subsidiary (S Ltd)

2. Calculation of net Assets of Subsidiary (S ltd).

Particulars	At year end	At Acquisition date	Post acquisition date
Share Capital	******	******	*******
Retained Earnings	******	******	*******
Total	******	********	*******

3. Calculation of Goodwill

Consideration Transferred	*****
Plus: Non-Controlling Interest at acquisition (Based on w2)	*****
Less: Net assets at acquisition (Based on w2)	(*****)
	*****
Impairment to date	(*****)
Balance C/F	*****

 

The double entry to consolidate the subsidiary will be:

 Share of Subsidiary’s net assets Dr          *****

Goodwill                                      Dr           ****

Investment in subsidiary              Cr            ****

 

4. Calculation of Non-controlling Interest (NCI) at year end.

Particulars	Amount
At acquisition (NCI % x net assets based on w-2) or Fair Value	*****
Share of Post-acquisition profits and other reserves (NCI% x Post –acquisition	*****
	******

 

5. Calculate retained Earnings

Particulars	Amount
P Ltd (100%)	*****
S Ltd. (Share of post-acquisition retained earnings (Based on w-2)	*****
Goodwill Impairment to date (based on w-2)	(****)
Group Retained Earnings	******

Financial statements as per IAS 1

 The financial statements as per IAS 1 Contains

1. Statement of Financial position (Balance Sheet) as at.....

2.  The statement or profit or loss and other Comprehensive income for the period ended.

3. The statement of changes of equity as at.

4. The statement of Cash flows for the period ended

5. notes, comprising a summary of significant accounting policies and other explanatory notes comparative information prescribed by the standard.

The statement of financial position, often called the balance sheet, is a financial statement that reports the assets, liabilities, and equity of a company on a given date. Balance sheets provide the basis for computing rates of return for investors and evaluating a company's capital structure. The balance sheet is one of the three core financial statements that are used to evaluate a business.

The statement of comprehensive income is a financial statement that summarizes both standard net income and other comprehensive income (OCI). The net income is the result obtained by preparing an income statement. The purpose of the statement of profit or loss and other comprehensive income (PLOCI) is to show an entity’s financial performance in a way that is useful to a wide range of users.

An equity statement – also referred to as a statement of owner’s equity or statement of changes in equity – is a financial statement that a company is required to prepare along with other important financial documents at the end of a reporting period. The statement of changes in equity reports changes in the equity (ownership) accounts for a corporation. Equity can be defined as the worth or value to the owners of the company.

The cash flow statement (CFS), is a financial statement that summarizes the movement of cash and cash equivalents (CCE) that come in and go out of a company. Cash flows are classified and presented into operating activities (either using the 'direct' or 'indirect' method), investing activities or financing activities, with the latter two categories generally presented on a gross basis.