Corporate Accounting Report: Erik Ltd Consolidation Analysis

This report provides a detailed analysis of the corporate accounting practices related to the consolidation of financial statements for Erik Ltd. It begins by presenting consolidated financial statements as of July 1, 2017, following a business combination, including calculations of net fair value, equity, and consideration. The report then outlines the consolidation journal entries and presents a consolidated worksheet to determine the financial position of the group. Further, the report prepares and analyzes consolidated worksheet entries as of June 30, 2018, providing insights into the impact of the business combination on Erik Ltd's financial position. The analysis highlights the determination of goodwill and the overall increase in assets, supported by references to relevant accounting literature. The report offers a comprehensive overview of the consolidation process, providing valuable insights into financial statement preparation and analysis.

Running head: CORPORATE ACCOUNTING
Corporate Accounting
Student Name:
Student Number:
Authors Note:

1CORPORATE ACCOUNTING
Table of Contents
Calculations:...............................................................................................................................2
1. Consolidated financial statements for Erik Ltd’s group at 1 July 2017, which is prepared
after the business combination...............................................................................................2
Calculation analysis:..........................................................................................................2
Consolidation journal entries:............................................................................................4
Consolidated worksheet:....................................................................................................5
Financial consolidated statement:......................................................................................6
2. Preparing the consolidated worksheet entries for Erik Ltd’s group at 30 June 2018:.......7
Consolidation worksheet entries at 30 June 2018..............................................................7
Consolidation worksheet entries at 30 June 2018..............................................................8
Analysis:.....................................................................................................................................9
References and Bibliography:..................................................................................................10

2CORPORATE ACCOUNTING
Calculations:
1. Consolidated financial statements for Erik Ltd’s group at 1 July 2017, which is
prepared after the business combination
Calculation analysis:

3CORPORATE ACCOUNTING
The above calculations directly provide information regarding the net fair value after
tax for Inventories, Plant and equipment. This valuation is mainly used for detecting the level
of valuation that can be used for supporting the Business combination valuation entries. The
total value of equity has also been conducted for Finn Ltd, which can be used for detecting
the level of pre-acquisition entries. Further calculations are mainly conducted for determining
the level of after-tax claims, research and development made by the organization. Moreover,
the information regarding the net consideration that is been transferred after the dividend
deduction are also depicted. In addition, the net fair value of Finn Ltd is mainly calculated to
demining the level of goodwill that has been considered while acquiring the organization.
Loftus et al. (2018) indicated that with the help of consolidations companies are able to
prepare appropriate financial statement that accounts for the actual financial position of the
organization after the acquisition.

4CORPORATE ACCOUNTING
Consolidation journal entries:
The calculations in the table mainly represents the Journal for Business Combination
Valuation Entries and Pre-acquisition entries. The journal entries presented in the above table
has directly helped in impacting the consolidation worksheet for Erik and Finn Ltd during the
June of 2017.

5CORPORATE ACCOUNTING
Consolidated worksheet:
The table mainly presents that Consolidated worksheet entries for Erik and Finn Ltd
to determine the actual financial position of the Group after the acquisition of Finn Ltd. From
the relevant calculations, it has been detected that the total value of the organization has
increased from the levels of 380,000 to 415,200. The relevant journal entries that has an
impact on the total consolidated financial statement is directly represented in the above table.

6CORPORATE ACCOUNTING
Financial consolidated statement:

7CORPORATE ACCOUNTING
2. Preparing the consolidated worksheet entries for Erik Ltd’s group at 30 June 2018:
Consolidation worksheet entries at 30 June 2018

8CORPORATE ACCOUNTING
Consolidation worksheet entries at 30 June 2018
The above two tables provide information regarding the Consolidation worksheet
entries at 30 June 2018, which has been conducted to determine the actual value for the
BCVR and Pre-acquisition entries. These entries would eventually help in determining the
appropriate level of changes that could be made to the financial position of the organization
during 2018. These entries can be used for preparing the consolidated worksheet for
determining the appropriate level assets for the organization.

9CORPORATE ACCOUNTING
Analysis:
The overall analysis of the work sheet entries and the financial position of Erik Ltd
after the acquisition of Finn Ltd has indicated a positive attribute for the organization. The
analysis has indicated that the overall goodwill during 2018 was mainly amounted to the
levels of 2,360 after conducting the relevant adjustments. The financial position of Erik Ltd
has not improved immensely after the acquisition Finn Ltd, as the overall increment in the
value of the assets was at the levels of 35,200. Leo, et al. (2018) argued that companies
without conducting relevant research and calculations mainly end up acquiring companies
that does not support their operations, while not appropriately increasing the combined asset
level.

10CORPORATE ACCOUNTING
References and Bibliography:
Kieso, D.E., Weygandt, J.J. and Warfield, T.D., 2019. Intermediate accounting. John Wiley
& Sons.
Leo, K., Knapp, J., McGowan, S. and Sweeting, J., 2018. Company accounting. 11th ed.
Australia: John Wiley and Sons. Available from: ProQuest Ebook Central.
Loftus, J., Leo, K., Daniliuc, S., Boys, N., Luke, B., Ang, H. and Byrnes, K., 2018. Financial
reporting. 2nd ed., Wiley, Melbourne. Available from: ProQuest Ebook Central.
Reid, W., 2018. The meaning of company accounts. Routledge.