What eliminations are carried out during the process of drawing up the consolidated financial statements? What is the reason for carrying out the deletion records? 2. A who works as a financial analyst argues that the information provided in the consolidated financial statements is not useful information for an investor. Do you agree with A's point of view and why?
1. What eliminations are carried out during the process of drawing up the consolidated financial statements? What is the reason for carrying out the deletion records?
2. A who works as a financial analyst argues that the information provided in the consolidated financial statements is not useful information for an investor. Do you agree with A's point of view and why?
1. Some entries must be eliminated while making CFS so that duplication of financial information can be restricted. The transactions that should be eliminated are inter-company sales transactions, inter-company equity transactions, inter-company purchase transactions, and some other inter-company financial transactions. The eliminations are done so that the financial statements are not misstated and will depict the real profit or loss of the group company that is of parents and subsidiaries.
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