Consolidating two balance sheets
I use it this way because for me it’s easier to verify and identify mistakes, but it’s up to you.
I have described the consolidation procedures and their 3-step process in my previous article with the summary of IFRS 10 Consolidated financial statements, but let me repeat it here and follow these steps: After you make sure that all subsidiary’s assets and liabilities are stated at fair values and all the other conditions are met, you can combine, or add up like items.
Therefore you need to : After we have completed all steps or consolidation procedures, we can add up all the combined numbers with our adjustments and thus we arrive at consolidated statement of financial position.
You can revise all the steps and formulas in Excel file that you can download at the end of this article.
If you’d like to revise a theory first, then please read my summary of IFRS 3 Business Combinations and IFRS 10 Consolidated Financial Statements, both of them contain video in the end.
Here’s the question: Mommy Corp has owned 80% shares of Baby Ltd since Baby’s incorporation.
You’ll learn how to translate the subsidiary’s financial statements.
If you take action today and subscribe to the IFRS Kit, you’ll get it at discount! But when you need to deal with more complex situations, then you can forget or omit the things very easily. However, to make you happy, you can find the same case study solved “by the exam-style” in the attached excel file that you can download in the end of this article. But in most cases, there is lots of issues or circumstances that you need to take into account and exactly their significance and amount makes it all difficult. For example: I can go on and on, but I don’t want to discourage you.
However, if you need to know more about all these issues, I have covered them fully in my premium learning package the IFRS Kit, so please check out if interested.
I’ll do it on a case study, with explaining what I do and why.
If you don’t like reading, you can skip to the end of this article and watch my video.