ACQUISITION OF A WHOLLY OWNED SUBSIDIARY (100% INTEREST)

Preparation of Consolidated Statement of Financial Position

 Using consolidation working paper, eliminate Investment in Subsidiary account on the Parent’s statement of financial
position against the stockholder’s equity accounts in the statement of financial position of the subsidiary.
 Adjust the assets and liabilities of the subsidiary to their fair values.
 Recognize goodwill or gain on acquisition.
 Eliminate the remaining balance of Investment in subsidiary account.
 Recognize any non-controlling interest (measured at fair values).
 Prepare a consolidated statement of financial position.
NOTE: The above steps are only done in the consolidation working paper and therefore, they are not recorded of either the parent or
subsidiary company.

ACQUISITION OF A PARTIALLY OWNED SUBSIDIARY (LESS THAN 100%

INTEREST)
 Difference between partially owned and wholly owned subsidiary is the measurement of NON-CONTROLLING
INTEREST.
 As per IFRS 3, the entity has a choice between the FV or PROPORTIONATE SHARE.
 The option to value NCI at fair value will be used throughout (unless stated).