DFS Consolidated Balance Sheet

NickyW Registered Posts: 97 Regular contributor ⭐
Hi there - I was wondering if anyone could shed some light on this for me - whilst I understand how to do a consolidated balance sheet, I am finding it hard to understand the net assets bit once the consolidation has been done.
eg Dec 2003 Loitedde plc - the net assets of the parent Loittede are 46,626 and the subsidiary are 22,800. If Loitedde has an 80% share in the company why aren't the combined net assets 46626 + 80% x 22800 ie 64866.

I hope I am making myself clear!!



  • garry_coombs
    garry_coombs Registered Posts: 108 Dedicated contributor 🦉

    I've had a look at the paper and hopefully can explain a little.

    The things included in the Net Assets of the Consolidation are:
    1. Parents Share Capital and Share Premium (not the subsidiaries)
    2. Parents Total Retained Earnings
    3. Subsidiaries Retained Earnings since aquisition multiplied by owned %
    4. Minority Interest (Net assets at BS date muliplied by not owned %)

    1. 10,000 + 4,000 = 14,000
    2. 32,626 = 32,626
    3. ((16,800 - 14,320) x 75%) - 200 (goodwill) = 1660
    4. (22800 + 3680 (fair value adjustment) x 25% = 6620
    Total = 54906

    You don't include the Subsidiary share capital as the company is 'owned' by the shareholders of the parent.

    The other main difference is that you don't include the retained earnings from before aquisition, as this didn't happen during the parents ownership period

    Hope that helped a little.

    On another note, my tutor said not to go back past Dec '06 due to changes, anyone else heard this?
  • [Deleted User]
    The answer in the book is a bit complicated. I have done a simplified version which is easier to understand. Please find attached.
  • [Deleted User]
    You will have to forgive any spelling mistakes as I was in a rush doing it. I noticed I spelt consolidated wrong at a glance.
  • columbia
    columbia Registered Posts: 580 Epic contributor 🐘
    Hi Garry

    We too have been told to not go back any further than the 2006 papers as the standards changed then.
  • Rozzi Rainbow
    Rozzi Rainbow Registered Posts: 465 Dedicated contributor 🦉
    columbia wrote: »
    Hi Garry

    We too have been told to not go back any further than the 2006 papers as the standards changed then.

    We've been told this too, however we are using Kaplan books and they have re-written the questions prior to 2006 under the new standards. So if we want to look at say June 2005, we can use the questions from the back of the book and piece the exam paper together from them!
  • [Deleted User]
    It is still best to give all the papers a go regardless of the date. The more practice the better. You should still be able to complete the 2003 papers without any difficulty.
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