Consolidated Financial Statements PDF

CONSOLIDATED FINANCIAL STATEMENTS
PFRS 10: CONSOLIDATED FINANCIAL STATEMENTS

Who shall present consolidated FS? - Parent Entity
Exemptions:
A parent entity is exempt from presenting consolidated financial statements
if ALL of the following conditions are met:
(1) It is a wholly-owned subsidiary/partially owned-subsidiary
of another entity and all its owner do not object to it
for not presenting consolidated Financial Statements
(2) Its debt or equity instruments are NOT TRADED in a PUBLIC market.
(3) It did NOT FILE, nor is it in the process of filing, its financial statements
with a securities commission (SEC) for the purpose of issuing instruments
in a public market; and
(4) Its ultimate/any intermediate parent produces consolidated FS that are
available for public use and comply with PFRS.
After Business Combination, the parent and subsidiary retain their separate legal existence.
HOWEVER, for financial reporting purposes, they are viewed as SINGLE ECONOMIC ENTITY.
“CONSOLIDATED FINANCIAL STATEMENTS”

(as defined by PFRS 10) financial statements of a group in which Assets, Liabilities,
Equity, Income, Expense and Cash flows of the parent and its subsidiaries are
presented as those of a single economic entity.
BASIS FOR DETERMINING WHICH ENTITIES ARE CONSOLIDATED IN THE FS: CONTROL
BASIS OF INVESTORS TO DETERMINE WHETHER THE ENTITY IS A PARENT ENTITY: CONTROL
ACCOUNTING REQUIREMENTS:
UNIFORM ACCOUNTING POLICIES
Ø Consolidated financial statements shall be presented using “uniform accounting
policies” for like transactions and other events in similar transactions
Ø If that member of a group uses accounting policies different from those adopted
by group, APPROPRIATE ADJUSTMENTS shall be made.
REPORTING DATE
Financial statements used in consolidated financial statements: SAME REPORTING DATE
Unless, it is impracticable to do so.
Ø In any case, the difference between the date of the subsidiary’s FS and
that of the consolidated FS shall not exceed 3 months.
CONSOLIDATION PERIOD
Consolidation of an investee shall begin from the date the investor obtains control and
cease when the investor loses control of the investee.
MEASUREMENT
Income and Expenses of subsidiary shall be based on the amounts of the Assets and
liabilities recognized in the consolidated FS at the acquisition date
NON-CONTROLLING INTEREST
(by PFRS 10) equity in a subsidiary not attributable, directly or indirectly, to a parent.
Shall be presented in the consolidated SFP within THE EQUITY,
separately from the equity of the owners of the parent.
COMPONENTS OF NON-CONTROLLING INTEREST
(1) The amount of those non-controlling interest at the date of the original combination.
(2) Non-controlling interests’ share of changes in equity since the date of the combination.
NON-CONTROLLING INTERESTS IN PROFIT OR LOSS AND COMPREHENSIVE INCOME
The profit or loss and each component of other comprehensive income in the consolidated
statement of profit or loss and other comprehensive income shall be attributed to the ff:
(1) Owners of the parent
(2) Non-controlling interests
*even if this results in the NCI having a deficit balance
CONSOLIDATION PROCEDURES:
Consolidated FS are prepared by combining the financial statements
of the parent and its subsidiaries line by line by adding together similar items of assets, liabilities,
equity, income and expenses.
(1) The carrying amount of the parent’s investment in each subsidiary and the parent’s
portion of equity of each subsidiary are eliminated.
The resulting goodwill is then recognized in the consolidated FS in accordance with PFRS 3.
(2) Intragroup balances and transactions, including income, expenses and dividends,
are eliminated in full. Profits and losses resulting from intragroup transactions that
are recognized in assets, such as inventory and fixed assets, are eliminated in full.
(3) Non-controlling interests in the profit or loss of consolidated subsidiaries for
the reporting period are identified; and
(4) Non-controlling interests in the net assets of consolidated subsidiaries are identified
separately from the parent’s ownership interests in them.
Business Combination
Formulas
1.) Noncontrolling interest
Priority 1 = Fair value of NCI given to the problem but it should not be lower than the NCI - measured at
Non-controlling interest's proportionate share of Subsidairy's identifiable net assets @ Fair Value.
(hi guys, ito yung sa problem 3 na case: yung kay Acquired Company at Acquiree Company na nadiscuss natin noon.)
If fair value of NCI given to the problem is lower than NCI measured at proportionate share
of Subsidiary's identifiable net assets use the latter.
Compuation of NCI measured in proportionate share of Subsidiary's identifiable net assets.

Subsidiary net assets at Fair Value xxx
Multiply by: Noncontrolling interest x%
Fair value of NCI proportionate share in Subsidiary identifiable net assets xxx
Priority 2 = If Fair value of NCI is not given or unknown
Acquistion cost xxx

Divided by: Controlling interest x%
Total fair value of business xxx
Fair value of Noncontrolling interest xxx
Note: But again the computed Fair value of Noncontrolling interest should not be lower than
than the fair value of NCI in proportionate share in Subsidiary's identifiable net assets.
Note: We apply whichever is higher rule: Part of the new provision, NCI should not have
an amount that is lower than the fair value of NCI measured in proportionate share in
Subsidiary's identifiable net assets. We use whichever is higher.
2.) Result of acquisition
Acquisition cost (Consideration paid) xxx

FMV of NCI xxx
FMV of old investment in same company acquired ( less than 50%), included xxx
Contingent liabiilty xxx
Total xxx
Less: FMV of Subsidiary Net Assets (100%) xxx
Goodwill/Gain from acquisition xxx
3.) Consolidated total Assets
Parent total assets (book value) xxx

Subsidairy total assets (fair value) exclusive of goodwill, if any xxx
Goodwill - result from acquisition xxx
Payment - taken from the assets of the acquirer (xxx)
Consolidated total assets xxxx
4.) Consolidated retained earnings
Parent retained earnings before acquisition xxx

Add: Gain from acquistion, if any xxx
Total xxx
Less: Expenses (Direct cost, indirect cost) xxx
Consolidated retained earnings xxx
5.) Consolidated common stock
Parent common stock before acqquisition xxx

Add: New issued shares to acquire subsidairy @ Par value xxx
Consolidated Common Stock xxx
6.) Consolidated additional paid in capital
Parent additional paid in capital xxx

Add: New issued share to acquire subsidiay - excess of par xxx
Total xxx
Less: Stock issue cost, if any xxx
Consolidated additional paid in capital xxx
7.) Consolidated stockholders' equity
Consolidated common stock xxx

Consolidated additional paid in capital xxx
Consolidated retained earnings xxx
Noncontrolling interest xxx
Consolidated stockholders' equity xxx
CONSOLIDATED STATEMENT
BUSINESS COMBINATION
FORMULAS
Chapter 16
1.) Consolidated net income
Parent net income xxx

Less: Dividends income received from Subsidiary xxx
Parent income from it's own operation xxx
Less: Impairment loss on goodwill, if any xxx
Parent adjusted net
income xxx
Add: Subsidiary adjusted net income
Subsidiary reported net income xxx
+/- Amortization xxx
- impairment loss on goodwill, if any xxx
Consolidated net
income xxx
2.) Income from subsidiary

Subsidiary adjusted net income xxx
Multiply: Controlling interest x%
Income from
subsidiary xxx
3.) Consolidated net income attributable to parent
Parent net income xxx

Less: Dividends income received from Subsidiary xxx
Parent income from it's own operation xxx
Less: Impairment loss on goodwill, if any xxx
Parent adjusted net
income xxx
Add: Income from subsidiary #2 xxx
Consolidated net income attributable to parent xxx
4.) NCI in net income of Subsidiary/ Consolidated net income attributable to NCI

Multiply: Noncontrolling interest x%
NCI in net income of Subsidiary xxx
Parent retained earnings - January 1, current year xxx

Consolidated net income attributable to parent -
#3 xxx xxx
Total xxx
Less: Dividends declared - parent
only xxx
Consolidated retained earnings - December 31, current year xxx
Consolidated retained earnings formula if involves more the one previous year passed
Parent Reported Retained Earnings - January 1, current year xxx

Less: Impairment loss - previous year if any xxx
Parent Adjusted Retained Earnings - January 1, current year xxx
Add: Undistributed Subsidiary adjusted net income in previous year/s
Subsidiary Retained Earnings - January 1 current year xxx

Less: Subsidiary Retained Earnings - date of acquisition xxx
Undistributed Subsidiary unadjusted cumulative earnings (net income) xxx
Less: Amortization ( cumulative amortization ) xxx
Impairment of goodwill - previous year if any xxx xxx
Undistributed Subsidiary adjusted net income xxx
Less: NCI share in the income undistributed adjusted cumulative earnings xxx xxx
Consolidated Retained Earnings - January 1, current year xxx
Add: Consolidated net income attributable to parent - current year #3 xxx
Total xxx
Less: Dividends declared - parent only xxx
Consolidated Retained Earnings - ending xxx
First Year
Noncontrolling interest - January 1, current year - computed using formula chapter 15 xxx
Add: NCI in net income of Subsidiary/Consolidated net income attributable to NCI xxx
Total xxx
Less: Dividends declared x Noncontrolling interest xxx
Noncontrolling interest - December 31 current year xxx
Note: You must noted the initial Noncontrolling interest amount on the date of acquisition. Because that is always your
beginning
balances.
Computation of Noncontrolling interest more then one previous year passed
Noncontrolling interest - at the date of acquisition ( initial ) xxx

Add: NCI share in the income undistributed adjusted cumulative earnings

Impairment of goodwill - previous year if any xxx xxx
Multiply by: Noncontrolling interest x% xxx
Noncontrolling interest - January 1, current year xxx
Total xxx
Chapter 17
1.) Consolidated Sales
Parent xxx
Sabsidiary xxx
Total xxx
Less: Intercompany sales (Downstream sales + Upstream sales) xxx
Consolidated Sales xxx
2.) Consolidated cost of goods sold
First
Year
Parent xxx
Subsidiary xxx
Total xxx
Intercompany sales (Downstream sales + Upstream sales) (xxx)
Amortization of excess (inventory), if any xxx
Unrealized gross profit in ending inventory xxx
Cosolidated cost of goods sold xxx
Second Year
Parent xxx
Subsidiary xxx
Total xxx
Intercompany sales (Downstream sales + Upstream sales) (xxx)
Amortization of excess (inventory), if any xxx
Realized gross profit in beginning inventory (xxx)
Unrealized gross profit in ending inventory xxx
Cosolidated cost of goods sold xxx
3.) Consolidated Inventory
Parent xxx
Subsidiary xxx
Add: Excess of inventory FMV over BV during acquisition that are remained unsold, if any xxx xxx
Total xxx
Less: Unrealized gross profit in ending inventory (Downstream + Upstream) xxx
Consolidated inventory xxx
First
Year
Parent net income from own operation, exclusive of dividends income received from Subsidiary xxx
Impairment loss, if any (xxx)
Unrealized profit in ending inventory (Downstream sale) (xxx)
Parent adjusted net income xxx
+/- Amortization (xxx)
Unrealized profit in ending inventory (Upstream sale) (xxx) xxx
Consolidated net income xxx
Second Year
Realized profit in begining inventory xxx
Unrealized profit in ending inventory (xxx)
Realized profit in begining
inventory xxx
Unrealized profit in ending
inventory (xxx) xxx
First
Year
Unrealized profit in ending inventory (Upstream sale) (xxx)
Multiply by: Controlling interest x%
Income from subsidiary xxx
Second Year
First
Year
Unrealized profit in ending inventory (Downstream sale) (xxx)
Add: Income from subsidiary xxx
Second Year
7.) NCI in net income of Subsidiary/ Consolidated net income attributable to NCI
First
Year
Unrealized profit in ending inventory (Upstream sale) (xxx)
NCI in net income of Subsidiary/Consolidated net income attributable to NCI xxx
Second Year
NCI in net income of Subsidiary xxx
Parent retained earnings - January 1, current year xxx

Consolidated net income attributable to parent xxx xxx
Total xxx
Consolidated retained earnings - December 31, current year xxx
Parent Reported Retained Earnings - January 1, current year xxx

Less: Impairment loss - previous years if any xxx
Unrealized profit in ending inventory - recent previous year xxx xxx
Parent Adjusted Retained Earnings - January 1, current year xxx
Add: Undistributed Subsidiary adjusted net income in previous year/s

Undistributed Subsidiary unadjusted net income xxx
Impairment of goodwill - previous year if any xxx
Consolidated Retained Earnings - January 1, current year xxx

Add: Consolidated net income attributable to parent - current year #3 xxx
Total xxx
First
Year
Noncontrolling interest - January 1, current year - computed using formula chapter 15 xxx
Total xxx
Note: You must noted the initial Noncontrolling interest amount on the date of acquisition. Because it is always your
beginning balance.


Impairment of goodwill - previous year if any xxx
Multiply by: Noncontrolling interest x% xxx
Total xxx
Note: Why we adjust Retained earnings and Noncontrolling interest beginning with the unrealized profit in ending inventory
recent previous year?
Because we corrected net income of the current year with the unrealized profit in ending inventory recent previous
year, which is now realized profit in beginning inventory for the current year.
See the computation of adjusted net incomes for Parent and Subsidairy, we included realized profit in
beginning inventory to get adjusted net income. Make this a constant procedure. Because, I agree there
is other way. How? Don’t include realized profit in beginning in the computation of adjusted net income
and unrealized profit in ending recent previous year in adjusted retained earnings beginning to offset errors or
to counter balance. But again may I suggest to use the formula above constantly because it is seldom in
problem to have only Consolidated Retained Earnings as requirement normally consolidated net income is
also part of the requirement, with that you must included realized profit in beginning inventory.
CONSOLIDATED STATEMENT
BUSINESS COMBINATION
FORMULAS
Chapter 18
Year of sale (plant asset) - First year (Inventory)

Parent net income from own operation, exclusive of dividends received from subsidairy xxx
Impairment loss (xxx)
Net unrealized gain/loss on sale (depreciable asset) (xxx) Downstream sales
Unrealized gain/loss on sale (non-depreciable assets) (xxx)
Net unrealized gain/loss on sale (depreciable asset) (xxx) Upstream sales
Unrealized gain/loss on sale (non-depreciable assets) (xxx) xxx
Second Year (plant asset) - Second year (inventory)

Parent net income from own operation xxx
Realized gain/loss on sale (annual depreciation) xxx
Realized gain/loss on sale (annual depreciation - excess) xxx xxx


Net unrealized gain/loss on sale (depreciable asset) (xxx) Upstream sales only
Second Year (plant asset) - Second year (inventory


Unrealized profit in ending inventory (xxx) Upstream sales only
Realized gain/loss on sale (annual
depreciation) xxx

Parent net income from own operation, exclusive of dividends received from subsidairy xxx
Unrealized profit in ending inventory
(xxx)
Downstream
Net unrealized gain/loss on sale (depreciable asset) (xxx) sales
Second Year (plant asset) - Second year (inventory)

Parent net income from own operation xxx

Downstream
Unrealized profit in ending inventory (xxx) sales
4.) NCI in the net income of Subsidairy


Net unrealized gain/loss on sale (depreciable asset) (xxx) Upstream sales only
Multiply by: Noncontrolling interest %
Minority interest in net income xxx
Second Year (plant asset) - Second year (inventory


Unrealized profit in ending inventory (xxx) Upstream sales only
Multiply by: Noncontrolling interest %
Minority interest in net income xxx
5.) Consolidated Retained Earnings
Year of sale of plant assets

No adjustment in Retained earnings on intercompany sales of plant assets, they are adjustment in
consolidated net income in the year of sales.
Second year or More than one previous year passed:

Parent Reported Retained Earnings - beginning / January 1 xxx
Gain on acquisition - on the date of acquisition xxx
Impairment loss - previous years (cumulative) (xxx)
Unrealized profit in ending inventory - recent previous year xxx
Net unrealized gain/loss on sale (depreciable asset) - before adjustment of current year (xxx)
Unrealized gain/loss on sale (non-depreciable assets) (xxx) xxx
Parent Adjusted Retained Earnings - beginning / January 1 xxx
Add: Undistributed Subsidiary adjusted net income
Subsidiary Retained Earnings - beginning of current year xxx
Amortization ( cumulative amortization ) xxx
Unrealized profit in ending inventory - recent previous year (xxx)
Net unrealized (gain)/loss on sale (depreciable asset) - before adjustment of current year (xxx)
Unrealized (gain)/loss on sale (non-depreciable assets) (xxx)
Total xxx
Consolidated Retained Earnings - beginning/January 1 xxx
Add: Consolidated net income attributable to parent- current year xxx
Total xxx
Less: Dividends declared - parent only current year xxx
Year of sale of plant assets

No adjustment in Retained earnings on intercompany sales of plant assets, they are adjustment in
consolidated net income in the year of sales.

Subsidiary Retained Earnings - beginning of current year xxx
Amortization ( cumulative amortization ) xxx
Unrealized profit in ending inventory - recent previous year (xxx)
Net unrealized (gain)/loss on sale (depreciable asset) - before adjustment of current year (xxx)
Unrealized (gain)/loss on sale (non-depreciable assets) (xxx)
Total xxx
Multiply by: Noncontrolling interest % xxx xxx
Total xxx
7.) Plant and equipment on consolidated - Old cost or Cost prior to intercompany sales
8.) Accumulated Depreciation

Accumulated Depreciation - amount prior to intercompany sales (original or old value) - January 1, current xxx
Add: Depreciation for year - computed in original depreciation (OLD) xxx
Total xxx
9.) Total gain on sale of plant assets when asset sold intercompany is sold to outsider.
Actual gain in selling it to outsider xxx

Add: Remainining unrealized gain on sale of assets xxx
Total gain xxx
Note: Please observed the sign if it is unrealized loss, deduct.

Consolidated Financial Statements PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Consolidated Financial Statements PDF

Uploaded by

Copyright:

Available Formats

CONSOLIDATED FINANCIAL STATEMENTS

PFRS 10: CONSOLIDATED FINANCIAL STATEMENTS

“CONSOLIDATED FINANCIAL STATEMENTS”

1.) Noncontrolling interest

Compuation of NCI measured in proportionate share of Subsidiary's identifiable net assets.

Priority 2 = If Fair value of NCI is not given or unknown

Acquistion cost xxx

Acquisition cost (Consideration paid) xxx

3.) Consolidated total Assets

Parent total assets (book value) xxx

4.) Consolidated retained earnings

Parent retained earnings before acquisition xxx

5.) Consolidated common stock

Parent common stock before acqquisition xxx

6.) Consolidated additional paid in capital

Parent additional paid in capital xxx

7.) Consolidated stockholders' equity

Consolidated common stock xxx

1.) Consolidated net income

Parent net income xxx

2.) Income from subsidiary

Subsidiary reported net income xxx

3.) Consolidated net income attributable to parent

Parent net income xxx

Subsidiary reported net income xxx

5.) Consolidated retained earnings

Parent retained earnings - January 1, current year xxx

Parent Reported Retained Earnings - January 1, current year xxx

Subsidiary Retained Earnings - January 1 current year xxx

6.) Noncontrolling interest

Computation of Noncontrolling interest more then one previous year passed

Noncontrolling interest - at the date of acquisition ( initial ) xxx

Subsidiary Retained Earnings - January 1 current year xxx

1.) Consolidated Sales

2.) Consolidated cost of goods sold

3.) Consolidated Inventory

4.) Consolidated net income

6.) Consolidated net income attributable to parent

8.) Consolidated retained earnings

Parent retained earnings - January 1, current year xxx

Parent Reported Retained Earnings - January 1, current year xxx

Subsidiary Retained Earnings - January 1 current year xxx

Consolidated Retained Earnings - January 1, current year xxx

6.) Noncontrolling interest

Computation of Noncontrolling interest more then one previous year passed

Noncontrolling interest - at the date of acquisition ( initial ) xxx

Subsidiary Retained Earnings - January 1 current year xxx

1.) Consolidated net income

Year of sale (plant asset) - First year (Inventory)

Second Year (plant asset) - Second year (inventory)

2.) Income from subsidiary

Year of sale (plant asset) - First year (Inventory)

Unrealized profit in ending inventory (xxx)

Second Year (plant asset) - Second year (inventory

Realized profit in begining inventory xxx

3.) Consolidated net income attributable to parent

Year of sale (plant asset) - First year (Inventory)

Second Year (plant asset) - Second year (inventory)

Realized profit in begining inventory xxx

4.) NCI in the net income of Subsidairy

Year of sale (plant asset) - First year (Inventory)

Unrealized profit in ending inventory (xxx)

Second Year (plant asset) - Second year (inventory