Consolidated Accounts CAP2 Fin Reporting

ezypzy

Would greatly appreciate any tips on the best way to approach a consolidated Income Statement & Balance Sheet. I understand how to lay out the group structure, calculate goodwill and the most of the usual adjustments that come up but i get stuck on calculating the minority interest to put in the balance sheet and the reserves figure. I think i understand the basics of it but when there are so many adjustments I get confused about which adjustments affect the minority interest and reserves figures. Would really appreciate any help!!! I am soooo stressed with it :eek:

Odats

Hi OP,

This is the way I approached the consolidation revision last year for my Prof 3's. Its broken down into steps approach (Sandra Gleeson's approach):

Step1: Work out the group structure i.e parent subsidiary relationship, associate or joint venture.

Step 2: Calculate cost of the investment. Watch out for consideration if not in the form of cash or part shares part cash.

Step 3: Calculate Net assets at date of acquisition

Step 4: Fair Value Adjustments

Step 5: Calculate Goodwill

Step 6: Intercompany adjustments. i.e sales, URP,transfer of assets

Step 7: Non controlling interest calculation (Minority Interest back in the day)

Step 8: Group reserves

Step 9: Associate workings (Profit from associate undertaking)

Do as many past exam questions as possible and download ACCA financial reporting papers I think it is F7 from the website and you cannot go wrong.

Do questions on every scenario
i.e Acq of sub mid way through the year
Acq of foreign sub
Acq of foreign associate
Joint Venture
Acq part cash part shares
Consolidate statement of compreensive income and statement of financial position.

There is atleast one question of these scenarios on both old Prof 3 papers and ACCA papers and by being familiar with them you won't get caught on the day.

Hanley

And don't just assume Q1's gonna be a consol either. It could be in part B.

I know I was talking to Sandra a couple of weeks ago and she said not to be surprised if regular profit and loss, balance sheet and cash flow come up like Seeger in sample paper 1.

ezypzy

God would be great if just a standard I/S & B/S came up but doubt i'll be that lucky!!! Ye I practiced a good few simple ones today and think i've gotten a bit better so think i'l move on (after the long weekend of course!!!) to proper exam questions next! thanks for your help!