Financial Accounting

Running head: FINANCIAL ACCOUNTING
Financial Accounting
Name of the Student:
Name of the University:
Author’s Note

FINANCIAL ACCOUNTING
1
Table of Contents
Answer to Question 1................................................................................................................2
Answer to Question 2................................................................................................................2
Working Notes.......................................................................................................................2
Consolidated Financial Statement of P CO...........................................................................3
Answer to Question 3................................................................................................................4
Purpose of Preparing Consolidated Financial Statements.....................................................4
Non-Controlling Interest.......................................................................................................4
Principles of Consolidated Financial Statements..................................................................5
Consolidated Financial Statement.........................................................................................6
Answer to Question 4................................................................................................................6
Translation of Foreign Currency...........................................................................................7
Answer to Question 5................................................................................................................8
Approaches for Corporate Reporting....................................................................................8
Integrated Reporting Framework..........................................................................................9
Analysis of the Article.........................................................................................................10
Reference.................................................................................................................................12

FINANCIAL ACCOUNTING
2
Answer to Question 1
As per the situation which is provided, the company which is being considered is
engaged in the construction business and therefore the business has option of recognition the
revenue which is generated by the business either during the period of operation of the contract
or can be recognized as per the proportion of completion of the contract. As per the provisions
which is stated in IAS 11 Construction Contracts, the revenue which is generated by a business
should be identified at the time when the contract is actually completed and it is also to be noted
that the costs should be directly associated with the operations of the business and cost that are
attributable to the contractor's general contracting activity which is related to the contract. The
provisions of IAS 11 also state that in case the construction contracts results can be reliably
estimated, income and expenses should be considered in the proportion of the stage of the
contract and the same needs to be recorded accordingly. This would lead to a better presentation
of the financial information of the business.
Answer to Question 2
Working Notes
P CO Statement of Financial position
Particulars Value Value
Assets
Non-current assets
Property, plant and equipment 50,000
30000 ordinary shares 30,000 80,000
Current assets 45,000
Total assets 125,000
Equity and liabilities
Equity
80000 ordinary shares 80,000
Retained earnings 25,000 105,000

FINANCIAL ACCOUNTING
3
Current liabilities 20,000
Total equity and liabilities 125,000
S CO Statement of Financial position
Particulars Value Value
Assets
Non-current assets
Property, plant and equipment 35,000
Current assets 35,000
Total assets 70,000
Equity and liabilities
Equity
40000 ordinary shares 40,000
Retained earnings 10,000 50,000
Current liabilities 20,000
Total equity and liabilities 70,000
Consolidated Financial Statement of P CO
Consolidated Statement of Financial position for P CO
Particulars Value Value
Assets
Non-current assets
Property, plant and equipment 85,000
Current assets 80,000
Total assets 165,000
Equity and liabilities
Equity
Equity attributable to owners of the parent
Share capital 80,000
Retained earnings 32,500
Non-contrlling interest 12,500 125,000
Current liabilities 40,000
Total equity and liabilities 165,000