Consolidated Financial Statements

[Punisher007]

Given: Company A owns 60% of Company B's total shares outstanding

When creating consolidated financials, would Company A report revenues, expenses, assets, and liabilities of Company B in their full amounts or at 60%.

 

[Ted]

With 60%, it's almost certain that they will use the consolidated method, which combines 100% of Company B's financials into Company A's. Company A then reports "minority interest" for the remaining 40% elsewhere on the financial statements.

 

[Punisher007]

Thanks Ted!

Is this covered in the CFA cirriculum?

 

[Ted]

It's either Level I or Level II.

 

[Crunchyman63]

Thats L2 material. I think I covered that in Intermediate Accounting 2 or 3.

 

[cost]

ted is correct... i believe the treatment is similar for US GAAP and CDN GAAP... dont forget to eliminate your equity and investment in sub accounts and back out your intercompany transactions