The Financial Accounting And Reporting

Running head: FINANCIAL ACCOUNTING AND REPORTING
Financial accounting and reporting
Name of the Student:
Name of the University:
Author’s Note:
Course ID:

FINANCIAL ACCOUNTING AND REPORTING
Samantha: Hello sir.
Kind Edwards: Hi, how are you doing?
Samantha: I am good Sir. Was busy addressing the issues that you raised.
King Edwards: I have seen the solution which you have provided against the issues raised.
Samantha: Yeah, I have addressed all the issues which were mainly regarding the parent-
subsidiary relationship of the company.
King Edwards: Can you explain me the issues briefly in relation to Australian Accounting
Standards.
Samantha: Sure sir, I will address the issues one by one with relation to AASB.
King Edwards: Okay, the first issue was regarding the Tom and Tools Ltd; both of them were
holding 50% of the shares.
Samantha: The issue was to determine the parent company and the subsidiary company. As we
have seen in the issue that Tom Ltd aggress with the Toots Ltd in providing the required thing to
the manager. Therefore, Tom Ltd is giving the fee to Toots Ltd for management, Tom ltd is
considered as a parent company.
King Edwards: What is the condition for accessing control as per AASB 10?
Samantha: As per AASB 10, in B2 paragraph an investor possess the power and control over the
investee. Thus, it is considered that the Tom Ltd is having power to direct relevant activities of
Jerry ltd. So, as per the standards it is considered that Tom Ltd should prepare the consolidated
financial statement.