what is the sequence of workpaper adjustments and eliminations while preparing a consolidated financial statement?

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The sequence of working paper adjustments and eliminations while preparing a consolidated financial statement are as follows:

In case the parent's shareholding in subsidiary is between 20% - 50%, only equity method should be used.
Combine like items of assets, liabilities, income, expenses and cash flows of the subsidiary with the parent.
Assets should be revalued at Fair Market Value for presentation in Consolidated Financial Statements.
Eliminate carrying amount of parent's investment in subsidiary
Eliminate parent's portion of equity of each subsidiary
Eliminate non-controlling interest part of post-acquisition of Retained Earnings of the subsidiary
Recognize non-controlling interest of net assets at the reporting date.
Compute goodwill and perform goodwill impairment test.
Eliminate related intragroup transactions (both upstream & downstream sales)
Consolidate retained earnings = 100% of parent + % holding * retained earnings in subsidiary

ekkarill92 answered 1 year ago

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