Now consolidating results


19-Feb-2017 23:23

There may be amalgamations, either by transfer of two or more undertakings to a new company, or to the transfer of one or more companies to an existing company".Consolidation is the practice, in business, of legally combining two or more organizations into a single new one.If the acquired company is liquidated then the company needs an additional entry to distribute the remaining assets to its shareholders.Treatment to the purchasing company: When the purchasing company acquires the subsidiary through the purchase of its common stock, it records in its books the investment in the acquired company and the disbursement of the payment for the stock acquired.The company does not need any entries to adjust this account balance unless the investment is considered impaired or there are liquidating dividends, both of which reduce the investment account.

The deciding factor, however, is significant influence.The purchasing company uses the cost method to account for this type of investment.Under the cost method, the investment is recorded at cost at the time of purchase.Treatment of Purchase Differentials: At the time of purchase, purchase differentials arise from the difference between the cost of the investment and the book value of the underlying assets.

Purchase differentials have two components: Purchase differentials need to be amortized over their useful life; however, new accounting guidance states that goodwill is not amortized or reduced until it is permanently impaired, or the underlying asset is sold.Regardless of the method of acquisition; direct costs, costs of issuing securities and indirect costs are treated as follows: Treatment to the acquiring company: When purchasing the net assets the acquiring company records in its books the receipt of the net assets and the disbursement of cash, the creation of a liability or the issuance of stock as a form of payment for the transfer.Treatment to the acquired company: The acquired company records in its books the elimination of its net assets and the receipt of cash, receivables or investment in the acquiring company (if what was received from the transfer included common stock from the purchasing company).Such disclosures are: When a company purchases 20% or less of the outstanding common stock, the purchasing company’s influence over the acquired company is not significant.



Register now. Forgot your username? Forgot your password? Login Or Login to. Personal. North Online. We'll send you an sms or email when your super search results are available on My AMP, and an email with instructions on how to log in. Ten days after this, we will initiate consolidation of all the superannuation we find into your AMP… continue reading »


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EUR/GBP finally dropped after the formation of the head-and-shoulder pattern as EUR/GBP is now consolidating above the 0.8800 level. EUR/GBP is now trading below the 50, 100 and 200-period simple moving averages… continue reading »


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To summarize and report results from separate worksheets, you can consolidate data from each separate worksheet into a master worksheet.… continue reading »


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By consolidating the ten pre-Napoleonic states into three parts, toppling the old dynasties, and inspiring patriots to develop new programmes of unity and independence, Napoleon advanced the cause of national unity.’… continue reading »


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However, if Company XYZ wants to consolidate its financial statements -- that is, it essentially "adds" the income statements, balance sheets and cash flow statements of XYZ and the four subsidiaries together -- the results give a better picture of the Company XYZ enterprise as a whole.… continue reading »


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