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Marqaz

In: Business and Management

Submitted By marqaz
Words 3116
Pages 13
Consolidation-Date of Acquisition Chapter 4
• Consolidated statements bring together the operating results and financial position of two or more separate legal entities into a single set of statements for the economic entity as a whole. • To accomplish this, the consolidation process includes procedures that eliminate all effects of intercorporate ownership and intercompany transactions.
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Consolidation As Of The Date Of Acquisition

McGraw-Hill/Irwin

Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.

Consolidation-Date of Acquisition
• The procedures used in accounting for intercorporate investments were discussed in Chapter 2. • These procedures are important for the preparation of consolidated statements because the specific consolidation procedures depend on the way in which the parent accounts for its investment in a subsidiary. • The consolidated statements, however, are the same regardless of the method used by the parent company to account for the investment.
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Consolidation-GAAP

• Consolidated and unconsolidated financial statements are prepared using the same generally accepted accounting principles.

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Roadmap—Chapter 4

Roadmap—Chapters 5 to 10

• After introducing the consolidation workpaper, this chapter provides the foundation for an understanding of the preparation of consolidated financial statements by discussing the preparation of a consolidated balance sheet immediately following the establishment of a parent-subsidiary relationship.

• Chapter 5 includes the preparation of a full set of consolidated financial statements in subsequent periods, that is, after the date of acquisition. • Chapters 6 through 10 deal with intercorporate transfers and other more complex topics.

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Consolidation Workpapers
• The consolidation workpaper provides a mechanism for efficiently

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