Concept explainers
Consolidation of Statements:
In today’s world of business acquisition of smaller companies is common and such acquisitions helps in the growth of the parent company. Once a company acquires another company the net assets of the other company is recorded in the books of the parent company. Consolidation of financial statements of both the parent company and subsidiary company is important for the stockholders of the parent company. A parent company may choose any of the two basic methods for consolidation and they are the equity method or cost method. The accounting methods used by a parent company for consolidation is purely based on their convenience.
Amortization:
Amortization is same as depreciation, but it is used for intangible assets like patents, franchise,
To explain: What is the non-controlling share of consolidated income and does it reflect fair value adjustments at purchase date and how it was displayed in the past and how it should be displayed now?
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Chapter 3 Solutions
Advanced Accounting
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