Report on Financial Statements and Indirect Equity Interest Analysis

This report provides an overview of financial statements, specifically focusing on scenarios involving indirect equity interests. It begins by defining financial statements and their key components, including the balance sheet, income statement, and cash flow statement. The report then delves into consolidated financial statements, explaining how parent and subsidiary companies are presented as a single entity. The core of the report discusses indirect equity interest, its calculation, and differentiation from direct ownership interest. Furthermore, it addresses the accounting for non-sequential acquisitions and the concept of non-controlling interest, highlighting their impact on financial reporting. The report concludes by emphasizing the importance of financial statements in assessing a company's performance and provides references for further reading. Desklib offers a platform where students can find similar solved assignments and study resources.

The financial statements
when there is an
indirect equity interest

 The presentation will focus on the financial
statements when there is an indirect equity
interest.
 In this non sequential acquisition and Non
controlling interest will be explained.
 The explanation of the direct and indirect
equity interest will also be done.
Introduction

 It reflects the financial position and the
financial performance of the company.
 It includes four thing which are stated
below:
 Balance sheet
 Cash flows
 Income statement
 Retained earnings
Financial statements

 To evaluate the capital structure and the
computing the rate of return this financial
statements are used (Müller, 2014).
 It includes assets, liabilities and equities of
company which is helpful for the investors
to take the decisions.
 The formula of the balance sheet is the:
Assets=Liabilities +Shareholders Equity
Balance sheet

 It benefits in examining the financial
presentation of the company for the specific
period.
 It includes revenues, losses, profit and
expenses.
 With the help of this financial report, the net
income and the gross income of the
company can be evaluated.
Income statements

 Net amount of the cash inflow and cash
outflow (Gilens and Page, 2014).
 This financial statements helps in analyzing
the ho much cash the company operates.
 It includes the three activities:
 Operating activity
 Investing activity
 Financing activity
Cash flows

 It is the monetary statements in which all
the paternal plus the subsidiary company
are presented as the single entity (Müller,
2014).
 The two basic procedures are followed when
the combined financial statements are
prepared:
 The substances that are accounted as
assets and liability has to be cancel.
 After cancelling all the items these are
added.
Consolidated financial
statements

 It is the equity security of the company
which is the outstanding equity interest of
the company.
 It is owned by the interest holder of the
company (Gilens and Page, 2014).
 when the interest are hold of the connected
intermediately and the dilutive effects of
the interest are also taken into the account.
Indirect equity interest

 This amount is evaluated by reproducing
the proportion of ownership with the every
entity.
 The possession interest is calculated by the
sum up all the business assets and
subtracting the depreciation amount so that
net value asset can be ascertained
(Kalemis, et al., 2013).
Calculation of indirect
interest

 It is the possession of the equity, stock in
the interest of the profit of the disclosing
entity.
 It is the aggregate purchase price for the
direct ownership interest.
 In this the disclosing entity is that which is
furnishing the services and arranging for
that.
Direct ownership interest

 In the disclosing entity indirect possession
concentration is the entity which has the
direct and the indirect ownership interest.
 It helps in governing and operating and
financial activities so that the benefits from
the activities can be powered.
 It is the interest which can arise without the
direct ownership interest.
Indirect interest

 When the company purchases the shares of
the other company so that the control in
that company can be gained.
 When more than the 50% of the firm’s stock
is taken so that the decisions can be taken.
 Acquisition diversified the market of the
company at the extent level (Matlen and
Klahr, 2013).
Acquisition