Consolidated Balance Sheets - Can any help!

Chrissiemartin1Chrissiemartin1 Settling In NicelyPosts: 18Registered
I am struggling with Consolidated Balance sheets and how you do them tI have read the example in the book about 4 times and I still cant get it right - any help please ..... is hoping the penny drops soon!

Thanks in advance xx:thumbup1:

Comments

  • princess246princess246 Feels At Home Posts: 49Registered
    Hello

    First thing that you need to get your head round is the workings, as you cannot consolidate the balance sheet until you have worked out your workings.

    Do you understand how to do the workings?
  • peugeotpeugeot Experienced Mentor Posts: 624Registered
    I did an article on consolidated balance sheets, which can be found here

    I hope it helps.

    Kind regards
    Steve
  • vishavisha Well-Known Posts: 218Registered
    Consolidated balance sheet
    This question is not about adding across the two balance sheets but 85% of the marks are allocated to the 5 workings that you MUST show to an examiner
    Working 1- Relationship (5%)
    Show what percentage dos the Parent company owns of the subsidiary. Say 75% (A)

    Working 2 (2 parts) – Valuation of S- subsidiary at Acquisition date and Balance sheet date (40%)
    Share Capital…………………………………@ A date……………………………………..……………………@ b/s date
    Share Premium……………………………[email protected] A date……………………………………………………………@ b/s date
    Retained profit & loss…………………@ A date……difference= this years profit…(B)…… @ b/s date
    Property Valuation……………………[email protected] A date…………………………………………………………[email protected] b/s date
    Total value of S at ……………….Acquisition Date…(C)……………………………………….Balance sheet Date (D)

    Working 3 Goodwill calculation (20%)
    Valuation of S at the acquisition date (C) in working 2 times (A) in working 1 = Value of S acquired (E)
    Payment for the investment in the Subsidiary (from P’s balance sheet) less Value of S acquired (E) equals GOODWILL.
    GOODWILL less amortisation (E) equals GOODWILL to be shown in the consolidated balance sheet.

    Working 4 – parent’s company’s Profit & loss A/C (15%)
    P’s Retained profit and Loss
    Plus (this year’s profit of S (B) in working 2 times (A) in working 1)
    Less goodwill amortisation (E) from working 3
    Equals Retained profit for the Parent company to be shown in the consolidated a/c

    Working 5 – Minority interest (5%)
    Valuation of S at the balance date (D) from working 2 times the minority % This working will go as a minority interest on the consolidated balance sheet.

    Consolidated Balance sheet of the GROUP as at DATE (15%)
    Non-Current assets
    Goodwill ( NET of amortisation) from working 3 (E)
    Total of premises of both P & S plus Revaluation (5%) (students very often forget this)
    Total of other fixed assets of both P & S

    Current assets
    Total of Current assets of both P & S

    Non Current assets
    Total of Non-Current assets of both P & S



    Represented by ( ONLY FIGURES FROM P’s Balance Sheet) (5%)
    P’s Share Capital
    P’s Share premium
    P’s Retained Profit – working 4
    S’s minority interest – working 5

    Consolidated completed and balanced.
  • Chrissiemartin1Chrissiemartin1 Settling In Nicely Posts: 18Registered
    Not really
  • Chrissiemartin1Chrissiemartin1 Settling In Nicely Posts: 18Registered
    peugeot wrote: »
    I did an article on consolidated balance sheets, which can be found here

    I hope it helps.

    Kind regards
    Steve
    Steve I cant view this article can you email it to me [email protected]
    thanks
  • vishavisha Well-Known Posts: 218Registered
    which part of workings you do not understand?

    start with working 1

    do you understand this working?
  • peugeotpeugeot Experienced Mentor Posts: 624Registered
    Hi,

    Unfortunately I can't email you the article, but if you log on to

    www.accountancystudents.co.uk

    Then go into Articles, and Financial Reporting, the consolidated balance sheet article is there.

    Kind regards
    Steve
  • princess246princess246 Feels At Home Posts: 49Registered
    Hello

    Have you got any further with getting to grips with this?
  • Chrissiemartin1Chrissiemartin1 Settling In Nicely Posts: 18Registered
    thanks
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