We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Group accounts - Essay Example

Comments (0)
There are a lot of separate entities that provide goods and services which produce accounting and financial statements which are subsidiaries of group companies. Unless a consolidated group accounts are prepared and presented the accounts will not presenting a fair view of the activities of the group as a whole (Catherine Hernandez)…
Download full paper
Group accounts
Read TextPreview

Extract of sample
Group accounts

Download file to see previous pages... FRS 2 'Accounting for Subsidiary Undertakings' details the conditions under which a parent company of subsidiaries should prepare and present consolidated financial statements. The FRS also spells out the manner in which the consolidated accounts need to be prepared. As per the FRS the purpose of the consolidated financial statements is to provide detailed information about the activities of the whole group of undertakings including the subsidiaries (ASB). The FRS adopts the definition of a group as provided by the Companies Act 1985 as amended by the Companies Act 1989.
In the preparation of group accounts the primary consideration should be the effect on the users of the financial statements with respect to their ability to see the complete economic activities of the group and to ascertain the exposure of the parent company to risk through its interests in the subsidiaries and participation in their activities. Hence it becomes necessary that the qualitative aspects of materiality are given full consideration in respect of preparation of the group accounts.
The accounts of the subsidiaries are to be consolidated in accordance with the procedure laid down in FRS 2. This requires consolidation on a line-by-line basis and also the removal of the all transactions within the group companies. Goodwill on acquisition is to be calculated on the basis of FRS 2 and FRS 7.
In order to ensure that the parent company group accounts comply with the UK Generally Accepted Accounting Principles (GAAP) adjustments to the data from the subsidiary companies' accounts need to be made as the first step in the consolidation process. These adjustments managements may related to the profits or losses on disposal of assets and the notional interest and any directly controlled assets and liabilities that have been excluded from the subsidiary accounts.
The effect of consolidating the parent and the subsidiary companies may be that the aggregation being undertaken in the process of consolidation may obscure the useful information about the different companies whose accounts are being consolidated and by inclusion of the activities in the consolidated financial statements. Hence the parent companies usually provide a segment-wise analysis of the activities and their results in the financial statements with useful information on the various risks and rewards, as well as the growth and potential for profitability for different member companies of the group.
It is also mandatory that the financial statements of all subsidiary companies to be consolidated should have the same financial year end and must represent the financial results for the same accounting period as that of the parent company. When the parent company acquires a subsidiary company according to the FRS the identifiable assets and liabilities shall have to be brought in to the consolidation at fair values on the date the company became the subsidiary. This is so even when the acquisition is made in different stages.
Cash Flow

A company's financial statements have three important components. The balance sheet, income statement and the cash flow statement. The balance sheet gives an overview of the assets and ...Download file to see next pagesRead More
Comments (0)
Click to create a comment
Finance and accounts
These situations should at least be reduced if they cannot be reduced as a whole. The process of loss reduction involves a complex understanding about the following terminologies:1.CAPM and Arbitrage Pricing Theory 2.Efficient markets hypothesis and Pecking order theory 3.Modigilani and Miller approach and Residual theory
21 Pages(5250 words)Essay
Analyze of Southern Cross Healthcare Accounts
The performance of the company triples up the value of its shares. The demand for health care service remains high in the year 2007. The Group manage to increase the bed capacity by 25% during the year. This was much well ahead of the expectation with a net 132 homes and 7,298 bed added to the group.
3 Pages(750 words)Essay
Analysis of Accounts
The wet weather in the summer of 2012 has affected sales. High Dean plc is considering making a substantial, long-term investment in Margate plc. High Dean plc operates across Europe in the leisure and hospitality industries. They are in a strong financial position with cash available to invest.
8 Pages(2000 words)Case Study
Management Accounts
Cost allocation and cost apportionment are the two procedures which describe the identification and allotment of costs to cost centres or cost units. Cost allocation refers to the allotment of all the items of cost to cost centres or cost units whereas cost apportionment refers to the allotment of proportions of items of cost to cost centres or cost units Thus, the former involves the process of charging direct expenditure to cost centres or cost units whereas the latter involves the process of charging indirect expenditure to cost centres or cost units.
10 Pages(2500 words)Essay
BMW Group
Several reasons have attributed towards the limited financial earnings of the group, "ongoing consumer reticence in the main sales markets, the weak state of the used car markets as well as increasing refinancing costs" have significant influence on the earnings of the BMW Group.
7 Pages(1750 words)Case Study
Accounts Manipulation
Firms may window-dress the financial statements in order to show a rosy picture of their accounts. In such a case, the whole exercise of analyzing the statements becomes useless. Window-dressing is also done to forecast a better picture to shareholders, bankers and financial institutions.
9 Pages(2250 words)Essay
Coyote and Geronimo Accounts
The author states that Coyote and Geronimo depict determination that is evident in their actions. Coyote after summoning the people and brainstorming how they will attain the buffalo, he volunteers to undertake the mission, but fails on the initial occasion. This did not demoralize him where he tried the second instance as a dog.
2 Pages(500 words)Essay
Collection of accounts receivable
For example, the company can work with Net 30, where payments are supposed to be done within 30 days from the day of invoice. This method comes with a payment discount offered to debtors that pay earlier than the final date of the
1 Pages(250 words)Personal Statement
Sociological and Culturalist Accounts

The author states that the centrality and influence of mass media in modern culture cannot be overlooked. This is a true demonstration of how a number of media sources mainstream information to the society through such forms as internet, newspapers, articles. Such information creates an illusion of things not beneficial to the very culture.

13 Pages(2750 words)Essay
Accounts Receivable
However, in the businesses where long-term relationships have been developed between a company and its customers, the company may select to make transactions with its existing customers without receiving cash immediately.
3 Pages(750 words)Research Paper
Let us find you another Essay on topic Group accounts for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us