Nobody downloaded yet

Group accounts - Essay Example

Comments (0) Cite this document
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 paperFile format: .doc, available for editing
GRAB THE BEST PAPER97.7% of users find it useful
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
Cite this document
  • APA
  • MLA
(“Group accounts Essay Example | Topics and Well Written Essays - 1000 words”, n.d.)
Retrieved from
(Group Accounts Essay Example | Topics and Well Written Essays - 1000 Words)
“Group Accounts Essay Example | Topics and Well Written Essays - 1000 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
Finance and accounts
...? Finance and Accounts Stock markets are volatile and share traders need to know the basics of CAPM & Arbitrage Pricing Theory, Efficient Market Hypothesis & Pecking Order Theory, M&M & Residual Theory, Symbolic Interactionism, Ethnography & Phenomenology, Conceptual Framework of Accounting and Management Accounting to prior estimate the strategy formulator’s as well as co-share market participants moves and act accordingly. This article is an introduction to all those topics. Table of Contents: Particulars Pg. No. Introduction 4 CAPM and Arbitrage Pricing Theory 4-7 Efficient markets hypothesis and Pecking order theory 7-10 Modigilani and Miller approach and Residual theory 10-13...
21 Pages(5250 words)Essay
Analysis of Accounts
...considering historical financial information which reflects performance, position and trends of past (Peterson & Fabozzi, 2012). Another limitation is that a company’s financial position cannot be always compared against industry averages. The reason being that a company may be operating in conditions which are significantly different from the circumstances faced by other competing companies. This limitation is such that investors may at times develop uncertainty as to whether financial performance of a company under consideration shall be compared against competitors or not. Moreover, the differences in comparison of two or more companies may also arise due to the fact that different companies use different accounting...
8 Pages(2000 words)Case Study
Management Accounts
...The Home: Analysis of costing methods - Allocation and apportionment of overheads Terms of reference what the report is about This report aims at providing costing methods with appropriate procedure of allocation and apportionment cost to understand different costing methods and its deployment in management's decision making process. This will assist the managers of "The Home" to adopt and implement a sound management accounting system that will further give support to them in planning, organising, and controlling their nursing home business. The Home is a residential and day care nursing home in Newport, South Wales owned in partnership by Gary Salvage and Ryan Speed. 2. Procedures: Primary and secondary evidence...
10 Pages(2500 words)Essay
Accounts Manipulation
..., accounting conventions and personal judgements, and the judgements and conventions applied affect them materially. The soundness of the judgement necessarily depends on the competence and integrity of those who make them and on their adherence to the Generally Accepted Accounting Principles and Conventions. Since each use of accounts may have a different focus in viewing the financial statement, it is necessary that the accounting statements are not biased in favour of anyone interested group. It is therefore, necessary for an accountant to ensure that the accounts represent a "true and fair" picture of the affairs...
9 Pages(2250 words)Essay
Interpretation of accounts
... equivalent. As explained in Sainsbury’s Annual Report, this has been caused by a substantial decrease in the fair value of the company’s investments in properties. This decrease had to be recognized as a loss in compliance with generally accepted accounting principles. (The vertical analysis of the financial statements and the computation of the ratios are found in the Excel document.) List of References Tesco PLC (2009) Annual Report and Financial Statements 2009 Available from <> [accessed 7 August 2009] J Sainsbury PLC (2009) Annual Report and Financial Statements 2009 Available from [accessed 7 August... PLC and J Sainbury plc Company Profiles Tesco PLC stands...
8 Pages(2000 words)Assignment
Auditing Accounts Receivable
...Accounts Receivable Audits When auditing accounts receivable, it is absolutely essential to determine the accuracy of accounts as well as ensuring that payment, discounts and additional fees are accurately applied to each customer account. This may not always be an easy task as the existence and rights assertions are necessary to determine correct accounting and reporting procedures. “Assertions regarding existence or occurrence address whether assets and liabilities exist at a given date and whether recorded transactions occurred during a given period” (Clikeman, 2004). Each transaction or financial claim should be effectively verified by supporting...
2 Pages(500 words)Essay
Coyote and Geronimo Accounts
...Coyote and Geronimo Accounts Coyote and Geronimo’s accounts depict protagonists’ diverse character traits and contributions they made in their respective societies. Coyote from, “How the Buffalo Were Released on Earth” is a mystical character evident via his actions (Welker). Coyote resulted to applying extraordinary tactics to attain buffalo from Humpback who had hoarded it while his society experienced hunger. Initially, he transformed to a killdeer, which the Humpback’s son admired for he did not have a pet, but the father declined. Finally, he changed into a dog that won the father’s admiration after a thorough scrutiny and allowed it to stay in the compound during the night. Coyote caused the...
2 Pages(500 words)Essay
Collection of accounts receivable
...Collection of Accounts Receivable Accounts receivable if not well handled can lead to loose of so much money when written off as uncollectable. To avoid this, the company has to come up with a way to ensure that debts are paid in the right time. The best approach that Horowitz Construction Supplies Co.’s could use is setting a time limit for the payment. 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 payment period. The discount is aimed at encouraging the debtors to honor their debts faster. To avoid writing off a debt as...
1 Pages(250 words)Personal Statement
Sociological and Culturalist Accounts
...Sociological and Culturalist Accounts All forms of conveying information and messages through the mass media have the capabilities of robbing the society of its own personality; the cost and idea of what it takes to be a male or female being in the community; the sagacity of oneself; judgment of social class; ethnic background, and social race, of sexual status, and personality. Messages relayed through the mass media forms the best model and icon of streamlining our understanding of the human race and our earnest principals. The model perfects our view societal means and way of determining ethical or immorality, awful or excellent, constructive or unconstructive deeds and conducts in our society. Furthermore, the model...
13 Pages(2750 words)Essay
Accounts Receivable
...Accounts Receivable and How It Relates to the Medical Billing Field May 05, Accounting 101 ACCOUNTS RECEIVABLE: The money owed by a customer to a company for the products or services it sells or provides to the customer on credit is called “Account Receivable”. It is a current asset. The companies sell products or provide services to its customers. These products and services are sold and provided for a certain value of money which is received from the customer as a consideration. This consideration is usually received in the form of cash. However, it may also be received in the form of certain other assets. However, in the businesses where long-term relationships have...
3 Pages(750 words)Research Paper
sponsored ads
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.
Let us find you another Essay on topic Group accounts for FREE!
logo footer
Contact us:
Contact Us Now
FREE Mobile Apps:
  • StudentShare App Store
  • StudentShare Google play
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • Miscellaneous
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us