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Consolidation
02-19-2011, 09:31 AM
Post: #1
Consolidation
Dear Awl Salaam..
I need your best understanding regarding the consolidation of Subsidiary Accounts

Group ‘ p’ a parent company acquired 80 % to ‘S’ company on 01 Jan, 2001. When FV of PPE of ‘S’ is exceeded By Rs. 2 Million from its BV.
My question is that when the group will adjust FV in net asset at acquisition then group is passing the General Entry by debit the PPE and Credit the Group Reserve at 80 % and 20 % NCI. The goodwill as calculated by Parent is exceeded by the amount of this FV adjustment and the goodwill will shown in C-SOFP.
My question is that, How can the assets side of balance sheet { Good will (FV adjustment included) and PPE also included FV} equal to Equity Side ????

When I am solving the question then balance sheet is being out by FV adjustment amount in other word Assets side is greater then the Equity Side.

Kindly c0mments for S0lution

Regards

Umar
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