The determination and allocation of excess schedule is used for scheduling of all the adjustments that

will be made to all subsidiary accounts in the consolidated worksheet. Moreover, this schedule is also
used for the comparison of two variables: the fair value of the parent company and the book value of
the subsidiary. In this schedule, the fair value of the subsidiary is deducted from the book value of
interest acquired by the parent, then the excess will be allocated.

The preparation of consolidated financial statement subsequent to acquisition is similar to the process
of preparing a consolidated financial statement of financial position as of acquisition date. The
difference is that the former contains all the financial statements: Statement of Financial Position,
Statement of Comprehensive Income, and Statement of Retained Earnings. Moreover, there are
transactions between the parent and the subsidiary that occurred after the acquisition date, which were
already recorded in their books.

For consolidation purposes, the transactions between the parent and subsidiary are eliminated in the
working papers. First entry on the working paper is to eliminate Dividend Income account and NCI
against the Dividend Declared by subsidiary. Next is to eliminate equity accounts of the subsidiary
against the investment account and the NCI account. These accounts must be eliminated because,
economically speaking, they are viewed as one entity despite the fact that they are legally viewed as
separate entities. Allocation of the fixed assets that was determined on the D&A of Excess Schedule is
done by debiting the fixed assets and crediting the investment to the subsidiary and the non-controlling
interest.

The consolidated net income of the parent basically includes the combination of their revenues,
expenses, gains, losses, and other income earned and incurred only from the unaffiliated companies and
individuals. In determining the attributable controlled interest income, deduct the expenses from the
sales, and in cases that it is a partially owned subsidiary, comprehensive income attributable to the non-
controlling interest will be deducted to the consolidated comprehensive income in order to get the
comprehensive income attributable to controlling interest.

In preparing the consolidated comprehensive income, for full acquisition, the comprehensive income
from the subsidiary and the operations of the parent will be combined, then the computed amortization
will be deducted. To get the consolidated retained earnings, for full acquisition as well, add the adjusted
increase in earnings of the subsidiary with the retained earnings of the parent.