Consolidated Financial Statement

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TABLE OF CONTENTS

Introduction…………………………………………………………………………….....1 1.1Relationship between Holding/parent company- subsidiary………………………….2 2.1Consolidated Financial Statement…………………………………………………….4 3.1 The concept of Goodwill……………………………………………………………...5 3.1.1 Computation of Goodwill…………………………………………………………...6 3.1.2 Computation of negative Goodwill………………………………………………...7 4.1 The recommendation of the IASB……………………………………………………8 5.1 IFRS 36 Impairment of Assets………………………………………………………..9 6.1 IFRS 38 Intangible Assets…………………………………………………………...10 Reference…………………………………………………………………………….11

INTRODUCTION
Companies are able to turn into parent companies through numerous of different means. The two most common ways are through (1) acquisition of smaller companies and (2) the spinoff or creation of subsidiaries. The term Holding/ Parent – subsidiary is not equivalent to the term “parent/child”. This is a significant tip. While the parent business enterprise incorporate its subsidiary corporation. International accounting standards state that a parent company to produce consolidated financial statements showing position and results of the whole group. Because consolidated and its subsidiaries, to gauge the overall worth of an entire group of companies as opposed to one company’s stand alone position. The intellectual capital of an enterprise typically includes a portfolio of diverse intangible assets. Goodwill is base on the company’s character and consumer faithfulness. Positive goodwill should be capitalized and classified as an asset on the balance sheet. Any negative goodwill excess of the fair values of the non-monetary assets of acquired should be recognized in the profit and loss account the periods expected to be benefited such as: Recognition and measurements, Amortization, Revaluation, and Negative goodwill. And the recommendation of the (IASB).

1.1RELATIONSHIP
It is common to use the term “holding/parent and subsidiary” when describing the relationship between a business enterprise and its subsidiary. A company with the intention wheel further companies through owning an controlling quantity of selection supply is called parent company. A company owned by another company that controls more than 50% of its voting stock is called a subsidiary. The shareholder or association that has beneficial ownership whether direct or indirect of enough voting stock to effect company decisions. The rights of stockholder to vote on matters of corporate policy as well as on who is to compose the board of directors.

A parent corporation may hold its subsidiary accountable for the expectations of its board of directors. And to hold it accountable for performance of being, found liable for the negligence or wrong-doing of the subsidiary. After all, the parent in a parent/subsidiary relationship is merely a stockholder, and the law is clear that the stockholder is not liable for the actions, dents, r obligations of the corporation.

On the other hand, if the parent company movements extreme organize over the supplementary by, e.g., commingling money interchanging staff having its board provide as the board of the subordinate distribution office amenities with a common letterhead, and otherwise blurring the distinctions between the parent and the subsidiary as separate independent corporations, then each corporation is at risk for the unfunded liabilities of the other under the legal doctrine of “alter ego. “ below this policy a complainant might stab the business cloak” of the subsidiary conglomerate and achieve the assets of the parent corporation under the theory that the two corporations, for legal liability purpose, are not two independent corporations, but one corporation in fact. During this means the petitioner might look for expense of an unfunded liability of one...
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