Consolidated Financial Statements Assignment

Corporate Takeover Decision Making and the
Effects on consolidation Accounting

Executive Summary
Consolidation accounting refers to the process of consolidating the
financial statements like cash flow statement, income statement, balance
sheet, etc. of various subsidiary companies of the parent company in the
financial statements of the parent company. There are different steps
involved in preparation of consolidation accounting (Shealy, 2015).
The Report provides an evaluation of the type of strategy company should
use for acquiring another company. The results of the Report will show the
treatment of intra-group transactions in parent company with the reference
to different Australian accounting standards. The Report also examine the
effect of requirements of NCI disclosure on the process of consolidation.

Table of Contents
Executive Summary ........................................................................................................................2
INTRODUCTION...........................................................................................................................4
PART A...........................................................................................................................................4
PART B ...........................................................................................................................................7
PART C ...........................................................................................................................................9
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................12

INTRODUCTION
Corporate accounting refers to the detail procedure of preparing
accounting records for a single organization. Under corporate accounting all
the activities are performed by corporate accountant for determining the
financial status of a particular company.
Financial accounting refers to a detail process of preparing financial
statements of a company such as income statement, balance sheet etc.
Consolidated accounting includes consolidating the financial records for
various subsidiaries of parent company in the financial statements. The
report will provide an understanding of acquisition strategies, difference in
consolidation accounting and equity accounting. The Report will also provide
an understanding of intra-group transactions and disclosure requirements of
NCI.
PART A
AASB 3 Business Combinations-
AASB 3 describes the process of accounting when a company acquires
the control on another business in different ways. The business can acquire
control over another company either through merger or through acquisition.
According to this standard, acquisition method is used for recording
the liabilities and assets at fair value on the date of purchase. AASB 3
provides understanding of the principles of recognizing and measuring
liabilities and assets that are acquired, method of determining goodwill of
acquired company and various other disclosures (Richardson, 2017).
AASB 128 Investments in Associates and Joint ventures -
The ultimate objective of AASB 128 is to describe process of
accounting in when a company makes investment in other associate
company. It also explains the various requirements for using equity method
at the time of making investment in associate company or in joint venture.
AASB 128 applies to all the companies that are having joint control or are
having significant influence over other company.