All businesses must prepare a set of financial statements showing the activity for the previous accounting period.
This typically includes a balance statement, income statement, statement of cash flows and a report of shareholders' equity.
Below there are statements of financial positions of both Mommy and Baby at 31 December 20X4.
Prepare consolidated statement of financial position of Mommy Group as at 31 December 20X4.
I’ll do it on a case study, with explaining what I do and why.
Consolidation is the practice, in business, of legally combining two or more organizations into a single new one.
If a company owns between 0 and 20 percent of another company's stock, then the company uses the cost method for the investment.
If a company owns between 20 percent and 50 percent of another company's stock, the company uses the equity method.
The taxation term of consolidation refers to the treatment of a group of companies and other entities as one entity for tax purposes.
Under the Halsbury's Laws of England, 'amalgamation' is defined as "a blending together of two or more undertakings into one undertaking, the shareholders of each blending company, becoming, substantially, the shareholders of the blended undertakings.