Chapter 3: An Introduction to Consolidated Financial Statements 3-1
3-1 Chapter 3: An Introduction to Consolidated Financial Statements
Intro to Consolidations: Obiectives 1. Recognize the benefits and limitations of consolidated financial statements 2. Understand the requirements for inclusion of a subsidiary in consolidated financial statements 3. Apply the consolidation concepts to parent company recording of the investment in a subsidiary at the date of acquisition 4. Allocate the excess of the fair value over the book value of the subsidiary at the date of acquisition
3-2 Intro to Consolidations: Objectives 1. Recognize the benefits and limitations of consolidated financial statements. 2. Understand the requirements for inclusion of a subsidiary in consolidated financial statements. 3. Apply the consolidation concepts to parent company recording of the investment in a subsidiary at the date of acquisition. 4. Allocate the excess of the fair value over the book value of the subsidiary at the date of acquisition
Obiectives (continued 5. Learn the concept of noncontrolling interest when the parent company acquires less than 100%o ofthe subsidiary ' s outstanding common stock. 6. Amortize the excess of the fair value over the book value in periods subsequent to the acquisition 7. Prepare consolidated balance sheets subsequent to the date of acquisition, including preparation of elimination entries 8. Apply the concepts underlying preparation of a consolidated income statement
3-3 Objectives (continued) 5. Learn the concept of noncontrolling interest when the parent company acquires less than 100% of the subsidiary's outstanding common stock. 6. Amortize the excess of the fair value over the book value in periods subsequent to the acquisition. 7. Prepare consolidated balance sheets subsequent to the date of acquisition, including preparation of elimination entries. 8. Apply the concepts underlying preparation of a consolidated income statement
An introduction to Consolidated financial statements 1: Business combination consummated Through Stock Acquisitions
3-9 1: Business Combination Consummated Through Stock Acquisitions An Introduction to Consolidated Financial Statements
Consolidated financial statements O FASB asC 810: consolidation ◆FAS94、FAS160 O FRS 10: Consolidated financial statements ●中国企业会计准则第33号:合并财务报表
Consolidated financial statements FASB ASC 810: Consolidation: FAS 94、FAS 160 IFRS 10：Consolidated Financial Statements 中国企业会计准则第33号: 合并财务报表
Consolidated financial statements o FASB Statement No 94: Consolidation of All majority- owned Subsidiaries--an amendment of ARB No 51(Issue Date 10/87 Control based on share ownership majority and minority interest o FASB Statement No. 160: Noncontrolling Interests in Consolidated Financial Statements--an amendment of ARB No 51(ssue Date 12/2007, after 12/15/2008) Controlling and noncontrolling Interests
3-11 Consolidated financial statements FASB Statement No. 94 ：Consolidation of All Majorityowned Subsidiaries—an amendment of ARB No. 51 (Issue Date 10/87) – Control based on share ownership – majority and minority interest FASB Statement No. 160：Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51(Issue Date 12/2007, after 12/15/ 2008) – Controlling and Noncontrolling Interests
Parent-subsidiary relationship o A corporation becomes a subsidiary when another corporation either directly or indirectly acquires a controlling financial interest (generally over 50%o)of its outstanding voting stock. o The acquisition creates a new reporting entity that encompasses all operations controlled by the management of the parent
Parent-subsidiary relationship A corporation becomes a subsidiary when another corporation either directly or indirectly acquires a controlling financial interest (generally over 50% ) of its outstanding voting stock. The acquisition creates a new reporting entity that encompasses all operations controlled by the management of the parent
Five situations of control o Parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an enti o when the parent owns half or less of the voting power of an entity when there is: o Power over more than half of the voting rights by virtue of agreement with other investors. o Power to govern the financial and operating policies of the entity under a statute of an agreement o Power to appoint or remote the majority of the members of the board of directors Power to cast the majority of votes at meetings of the board of directors or equivalent governing body
Five situations of control Parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity. when the parent owns half or less of the voting power of an entity when there is : Power over more than half of the voting rights by virtue of agreement with other investors. Power to govern the financial and operating policies of the entity under a statute of an agreement Power to appoint or remote the majority of the members of the board of directors Power to cast the majority of votes at meetings of the board of directors or equivalent governing body
De facto contro(实际控制) o De facto control describes the situation where an entity owns less than 50% of voting shares in another entity, but is deemed to have control for reasons other than potential voting rights, contract or other statutory means Example 1: ownership of less than 50% of voting rights with dispersed public shareholding; Example 2: loss of ownership of more than 50% of voting rights with dispersed public shareholding
De facto control(实际控制) De facto control describes the situation where an entity owns less than 50% of voting shares in another entity, but is deemed to have control for reasons other than potential voting rights, contract or other statutory means. Example 1: ownership of less than 50% of voting rights with dispersed public shareholding; Example 2: loss of ownership of more than 50% of voting rights with dispersed public shareholding
联想控股(03396HK) 合併本公司及其附屬公司持有少於50%投票權的實體 管理贗認為雖然本公司及其附屬公司持有聯想集團的投票權少於50%·但基於以下因素對 其擁有實質性的控制權:1)截至2015年和2014年12月31日·本公司及其附屬公司為聯想集 團的單一最大股東·分別持有3091%和3047%權益;2)本公司獲得了聯想集團另一位股 東的「一致行動」承諾;以及3)聯想集團的其他投票權處於分散狀態·並且自聯想集團上市 以來·未有其他股東組成團體共同地行使其投票權以超過本公司及其附屬公司的總投票權
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