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Advance Financial Accounting (FIN-611)
VU
LESSON # 45
GROUP ACCOUNTS
Comprehensive Workings in Group Accounts
Consolidated Balance Sheet
W-
1
Number of ordinary shares of S Co
acquired by P Co
x 100 = %
H%
Total number of ordinary shares in S Co
100 - H% =
MI%
MI%
W-
2
Analysis of equity of S Co for pre and
post acquisition
Post-
Pre-acquisition
acquisition
All
Nil
Ordinary share capital
on the date of
after the date
acquisition
of acquisition
Reserves
All
Nil
Fair value adjustment
Total
H% of total
Parent's share
Parent's share
Minority's
MI% of total
Minority's share
share
W-
3
Calculation of
Goodwill
Rs.
Costo fo investment in S Co's ordinary
shares
*****
less Dividend received out of the
*****
237
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Advance Financial Accounting (FIN-611)
VU
preacquisition profits
*****
Pre-acquistion fair value of net assets (owners' equity) of S Co
x H%
*****
Goodwill
*****
less Impairment
loss
(****)
Goodwill to be presented in consolidated balance sheet
*****
W-
4
Calculation of Group
Reserves
Reserves of Parent Co
All
add Post acquisition equity of S Co to the extent of H%
*****
less Un-realized profit (if intra group sale
from P to S)
(All)
less Un-realized profit (if intra group sale from S to P) to the
extent of H%
(****)
less depreciation effect on fair vale adjustment to the extent of
H%
(****)
less impairment loss of
goodwill
(****)
*****
W-
5
Calculation of
Minority Interest
Owners' equity of S Co
All
add Fair value Adjustment
All
less URP (incase of intra group sale from S
to P)
(All)
less Depreciation effect on fair value
adjustment
(All)
Total value
Total
Minority
Interest =
Total x MI%
Calculations specific to the
scenario
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Advance Financial Accounting (FIN-611)
VU
Scenario
Action
1
Intra group loans
To be cancelled
To be cancelled and
balance if any to be shown
Intra group current
2
as goods in transit or cash
accounts
in transit, as the case may
be.
To be cancelled to the
extent of H%, the balance
Intra group
3
to be shown in the
dividend
consolidated balance sheet
as payable to Minority
To be added in the group
4
Negative goodwill
reserve
Reserves as on the
opening date of the year in
which the S Co was
During the year acquisition of S Co
acquired + profit for the
5
and calculation fo pre acquisition
year in which the S Co
reserves
was acuired to the extend
of the number of months
remained in the group's
acquisition
Consolidated Income Statement
W-
1
Calculation of opening balance of group's
retained profits
Opening balance of Retained profits of P Co
All
add Post acquisition opening balance of retained profits of S
Co x H%
*****
less Goodwill imapirment
loss
(****)
*****
W-
2
Calculation of
Minority Interest
Profit after tax of S Co.
*****
less Un-realized profit (if intra group sales
from S to P)
(****)
Net/Total
*****
239
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Advance Financial Accounting (FIN-611)
VU
Net/Total amount x MI% =
Minority Interest
Calculations specific to the
scenario
To be cancelled. TIP: All amount
of dividend paid by the S Co will
Intra group
be eliminated only the amount of
1
dividend
dividend paid by the P Co will
appear  in  the  Consolidated
Income Statement
Deduct the same amount from the
sales and also from the cost of
2
Intra group trading
goods sold in the consolidated
income statement
Add in the cosolidated cost of
goods sold and subtract from the
profit after tax of S Co before
applying  MI%  to
calculate
3
Unrealized profits
Minority interest (only when the
intra group trading is from S to P)
If it is intra group trading from P
to S then do nothin for Minority
Interest calculation
240