Advanced Financial Accounting
Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
bartleby

Videos

Textbook Question
Book Icon
Chapter 3, Problem 3.1Q

What is the basic idea underlying the preparation of consolidated financial statements?

Expert Solution & Answer
Check Mark
To determine

Concept Introduction:

Consolidation:The consolidation financial statements are the one which is prepared for providing a consolidated view of financials of the company having subsidiary companies. Consolidation can take place either by acquisition or purchase of voting stock or by merger.

The basic idea of underlying the preparation of consolidated financial statement.

Explanation of Solution

As per the new Companies Act 2013, all listed or unlisted companies having one or more subsidiary including joint venture, associate company are required to prepare consolidated financial statement along with their standalone financial statement for every financial year.

The basic idea for preparing the consolidated financial statements is that the financial position of the parent company and it’s all subsidiaries can be determined and the end results of the operations of both the companies can be ascertained. This is done on the basis of that the companies are working as a single unit.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Define what are consolidated financial statements and their usefulness.
Discuss the meaning of consolidated financial statements.
What is the objective of general purpose financial reporting?

Chapter 3 Solutions

Advanced Financial Accounting

Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Text book image
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Text book image
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Text book image
Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub
Text book image
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Text book image
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Text book image
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
ACCOUNTING BASICS: Debits and Credits Explained; Author: Accounting Stuff;https://www.youtube.com/watch?v=VhwZ9t2b3Zk;License: Standard Youtube License