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Uploaded by JerichoPedragosa on Mar 19, 2017

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Chapter9
Consolidated Financial Statement
(IFRS 10)

Business combination Is achle11ed by acquhlrJon of stock when on existing company acquires a

majority or oll of the stock of anotMr txi$ting company. ~ ocquirtr records tM ocquisitkm by
dt bltlng tht lnwstmtnt In SIO<lr occount for the con,/dtrotion g~n (pr/ct poid}, which includts
ca,h dl,bur>H, tllt fair valut of Olht, o"tts glvtn or ,tcuritits lswtd. Afttr tht ocqwltlon of
stock o rtlotlonshlp txlst thot of portnt/wbsld/ory rtlotlons/',p. Tht acqulrtr Is ca/ltd tht portnt
and tht ocqulrtt 1, co/ltd tht subsldloty.

Con1offdatN fln1nd1I statements

These ire the financial state~nts of a aroup In which the assets, liabilities, equity, income,
expenses and cash flows of the parent and Its 1ub1kHarin ,re presented H thaw of a single
economic entity. Consolidated financial statements are prepared when an entity controfs one
or more other entities.

Consalid- Proatdures- Basic Pmdplos

When preparing consolidated financial statements. an entity first combines the financial
statements of the parent and the subsidiaries on a "line-by-tine• basis by adding together like
items of assets, liabilities, equity, income, and expenses. So that the consolidated financial
statements present financial informition about the group as that of a single economic entity,
the following adjustments are made:
(a) The c~rrying amount d the p.arent's investment in e~h subsidiary -1nd the parent's
Portion of equity in ti<h subsidiary are elimin-1ted. Goodwill or a:ain on a Wircain
purchase if any is recoani.zed.
(bl Non-con1rollln11 lntereas in lhe profit or loss of conlOlidillCd sullsidiilries for lhe
rtportinc period ar• ldtntlfotd; and
(c) Non ,conttolllng interests in the net ass@ts of consolidated subsidiaries are identified

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