scholarly journals APPLICABILITY OF CONSOLIDATED TECHNIQUES IN THE VIEW OF ROMANIAN ACCOUNTING REGULATIONS

2016 ◽  
Author(s):  
Cristina Rosu
Keyword(s):  
Complex Structure ◽  
Balance Sheet ◽  
Financial Statements ◽  
Parent Company ◽  
Consolidated Financial Statements ◽  
Multiple Levels

The accounting regulations are more and more interested in groups of companies. In some cases, these regulations require for preparing the consolidated financial statements. This is the task of the parent company who keeps the consolidated accounts. To accomplish its goals, the consolidated accounting uses a couple of, so-called, consolidation techniques. These are applied in the case of groups of companies with a complex structure. Their goal is to elaborate the consolidated financial statements using a set of methods and empirical skills. In this article we synthetize and apply the consolidation techniques in the view of Romanian accounting regulations. The Romanian practice has revealed, especially, two techniques: one based on direct consolidation and another one based on multiple levels (phased consolidation). Therefore, this work regards only the technical side of consolidated accounting, accounting records being evaded. Furthermore, we focus only on the preparation of the consolidated balance sheet in the case of some hypothetical groups of companies.

Minority Interest in the Consolidated Retained Earnings Statement

2001 ◽  
Vol 15 (2) ◽  
pp. 119-146 ◽  
Author(s):  
Hugo Nurnberg
Keyword(s):  
Cash Flow ◽  
Balance Sheet ◽  
Financial Statements ◽  
Cash Flows ◽  
Parent Company ◽  
Consolidated Financial Statements ◽  
Entity Theory ◽  
Income Statement ◽  
Cash Flow Statement ◽  
Retained Earnings

Consolidated financial statements purport to report income, financial position, and cash flows of a parent company and its subsidiaries as if the group were a single company with one or more branches or divisions. Under the parent company theory, the consolidated entity perspective assumed in the consolidated income statement, the consolidated balance sheet, and the consolidated retained earnings statement differs from the consolidated entity perspective assumed in the consolidated cash flow statement. Even under extant expositions of the entity theory, the consolidated entity perspective assumed in the consolidated income statement, the consolidated balance sheet, and the consolidated cash flow statement differs from the consolidated entity perspective assumed in the consolidated retained earnings statement. This paper develops a consistent consolidated entity perspective for all four consolidated financial statements. It demonstrates that under the entity theory, consolidated retained earnings includes the separate equities of both the parent company stockholders and the minority interest. As such, both elements of retained earnings should be reported in the consolidated retained earnings statement to make it comparable to the consolidated retained earnings statement of companies without subsidiaries or with only wholly owned subsidiaries. The effect on certain financial ratios of public companies may be substantial. The paper also demonstrates that for purchased subsidiaries, minority interest in consolidated retained earnings includes unamortized write-ups of identifiable net assets and goodwill arising from purchase-type business combinations.

scholarly journals Consolidated techniques for groups of enterprises with complex structure

2009 ◽  
Author(s):  
Cristina Ciuraru-Andrica
Keyword(s):  
Complex Structure ◽  
Financial Statements ◽  
Consolidated Financial Statements

The preparation and disclosure of the financial statements of a group of enterprises involves some consolidation techniques. The Literature presents many techniques, but in practice are used two of them. They will be described first of all in a particular manner and after that in a comparative one. The group of entities can choose one of these techniques, the final result (the consolidated financial statements) being the same, whatever the option.

scholarly journals Measurement options for non-controlling interests and their effects on consolidated financial statements consistency. Which should the disclosure be?

2015 ◽  
Vol 12 (2) ◽  
pp. 293-302 ◽  
Author(s):  
Francesco Sotti ◽  
Luigi Rinaldi ◽  
Giovanna Gavana
Keyword(s):  
Financial Statements ◽  
Parent Company ◽  
Consolidated Financial Statements

This paper aims at emphasizing some drawbacks arising from the alternatives consolidation approaches allowed by the IFRS 3 revised 2008. We develop our analysis working on simulated figures to demonstrate that subsidiaries with similar underlying economics might have a different impact on the calculation of the group equity and income. That is merely due to the accounting treatment chosen by the parent company. This fact does not respect the consistency among values within consolidated financial statements and causes lack of comparability among consolidated financial statements prepared by different reporting entities. Since nowadays there is not any Standard requiring disclosure suitable for the comprehension of this matter, we suggest which relevant disclosure should be provided to better understand the composition of the group results

IFRS Adoption in the EU and the Challenge of Nomenclature Evidence from the UK, France, and Germany

2016 ◽  
pp. 134-143
Author(s):  
Matthias Nnadi ◽  
Sailesh Tanna
Keyword(s):  
Financial Reporting ◽  
Balance Sheet ◽  
Financial Statements ◽  
Stock Exchanges ◽  
The European Union ◽  
Consolidated Financial Statements ◽  
Financial Reporting Standards ◽  
Ifrs Adoption ◽  
The Uk ◽  
The Eu

Since the adoption of International Financial Reporting Standards (IFRS) and the subsequent directive by the European Union (EU), all companies operating in the EU are required to report their consolidated financial statements in line with the IFRS. This study examines the consolidated financial statements of the top 170 listed companies in three major EU stock exchanges (UK, France and Germany) and uncovered a disparity in the use of common nomenclatures. The findings reveal that the inconsistencies in the application of terminologies such as statement of financial position instead of balance sheet and sequence of arrangement of assets in order of liquidity constitute the main differences for entities operating in the three countries. Such differences pose an imminent challenge in the comparability and interpretation of financial results.

scholarly journals Disclosure of Subsidiaries with Non-controlling Interest in Accordance with IFRS 12: Case of Materiality

2016 ◽  
Vol 64 (1) ◽  
pp. 275-281 ◽  
Author(s):  
Tereza Gluzová
Keyword(s):  
Financial Reporting ◽  
Value Relevance ◽  
Stock Exchange ◽  
Financial Statements ◽  
Parent Company ◽  
Reporting Standards ◽  
Consolidated Financial Statements ◽  
Financial Reporting Standards ◽  
Disclosure Requirements ◽  
Definition Of

Consolidated financial statements present aggregated information for parent company and its subsidiaries. For non-wholly owned subsidiaries, International Financial Reporting Standards require non-controlling interest to be presented within consolidated equity to distinguish it from the amount of equity attributable to the shareholders of the parent. Since 2014, new standards on consolidation introduced broadened disclosure requirements for subsidiaries with material non-controlling interest. Definition of material non-controlling interest however is not included in the standards. The article provides the analysis of the financial statements published by companies listed on Prague Stock Exchange. Main focus is given to assessment criteria applied to identify material non-controlling interest. Consequently, study of compliance with the disclosure requirements for selected companies has been undertaken. The results of the analysis indicate whether value relevance of financial statements has been improved as a result of the new disclosures.

Anomalies of the control principle as part of the consolidated financial reporting concept

2021 ◽  
Vol 22 (1) ◽  
pp. 24-47
Author(s):  
Sergei V. KOLCHUGIN
Keyword(s):  
Financial Reporting ◽  
Methodological Approach ◽  
Financial Statements ◽  
Parent Company ◽  
Consolidated Financial Statements ◽  
Analysis And Synthesis ◽  
Methodological Principles ◽  
Control Criteria ◽  
Control Principle ◽  
The Impact

Subject. The article discusses the impact of the control principle on the existing consolidated financial reporting concept. Objectives. I evaluate possible alterations in the consolidation methodology as a result of the anomaly of the control principle. Methods. The study is based on the method of analogy for scientific hypothesizing. The study methodologically relies upon Thomas Kuhn's paradigm shift theory and the impact of anomalies on methodological principles of normal science. The study combines the analysis and synthesis, induction and deduction, and the method of comparison when analyzing the existing control criteria and identifying anomalies of the control principles as part of the consolidated financial reporting concept, and examining how the anomaly influences the consolidation methodology. Results. I discovered that the control principle in the consolidated financial reporting concept influences the consolidation methodology. I suggest using my own methodological approach to preparing consolidated financial statements in case of the non-equity control the parent company holds over its subsidiary. Conclusions and Relevance. The control principle in the consolidated financial reporting concept has not been formalized, thus causing anomalies affecting methodological principles of consolidated financial reporting. The non-equity control of the parent company over its subsidiary is a case in point. This control induces unavoidable changes in the consolidation methodology. The findings can be used to prepare consolidated financial statements in case of the non-equity control of the parent company over its subsidiary.

scholarly journals THE ADAPTATION OF PROFIT AND LOSS ACCOUNT TO THE CURRENT REQUIREMENTS REPORTING OF THE PERFORMANCES

10.26458/1637 ◽  
2016 ◽  
Vol 16 (3) ◽  
pp. 93
Author(s):  
Liana GADAU
Keyword(s):  
Financial Performance ◽  
Financial Reporting ◽  
Balance Sheet ◽  
Accounting Information ◽  
Financial Statements ◽  
Enterprise Performance ◽  
Consolidated Financial Statements ◽  
Dynamic Information ◽  
National Regulation ◽  
Complex Activities

The financial performance - a very complex notion and high informational load forusers of accounting information is reflected best by the financial statements, the profit andloss account and the situation of equity variations. The last situation can be presented as astatement of comprehensive income, including beside the result of profit and loss account, thegains and losses directly recognized in equities without passing through the profit and lossaccount.The development of increasingly complex activities emphasizes the utility, thenecessity of the profit and loss account in the financial reporting by increasing the interest inthe enterprise performance, especially for the dynamic information that this situation canprovide.Meanwhile, there is a declining interest in the historical costs and static information.Although the balance sheet contains information on performance, it does not prevent theachievement of its forecasts.In this paper we propose to approach the profit and loss account in view of tworepresentative referential, namely in terms of IAS 1 standard “The preparation andpresentation of the financial statements” and the national regulation, the Finance Order no.1802/2014 regarding the Approval of the Accounting Regulations on the annual individualand consolidated financial statements, aiming to emphasize the advantages, but also thelimits provided by this models. This way, will see which of these models of profit and lossaccount respond best to users’ needs.

scholarly journals Level of adherence of the brazilian listed companies of the telecommunications sector to the accounting pronouncement CPC 47

2020 ◽  
Vol 12 (1) ◽  
Author(s):  
Rafael Xavier de Oliveira ◽  
Thais Mota Crabbi ◽  
Jomar Miranda Rodrigues
Keyword(s):  
Voluntary Disclosure ◽  
Balance Sheet ◽  
Financial Statements ◽  
Consolidated Financial Statements ◽  
Accounting Disclosure ◽  
Telecommunications Sector ◽  
Current Topic ◽  
Income Statement ◽  
The One ◽  
High Level

Purpose: The present work sought to analyze the level of compliance of the Brazilian companies in the telecommunications sector listed in B3 to accounting pronouncement CPC 47. Methodology: A checklist was elaborated containing 8 (eight) criteria in which companies should disclose in order to obtain a high level of compliance with CPC 47. It’s characterized as a documentary research with analysis of content over the consolidated financial statements (balance sheet and income statement), explanatory notes and management reports published by the companies in the years 2017 and 2018. Results: The results show that no company presented adherence to the new standard. The company Telefonica Vivo Brazil was the one with the highest level, 56.25%, while Telebras presented the lowest, 29.16%. In addition, it was checked whether the companies already disclosed their information in accordance with the standard before it became mandatory, as a voluntary disclosure. The companies OI S.A., Telebras and Algar Telecom did not mention CPC 47 in the first three quarters of 2017. On the other hand, Telefonica Vivo Brazil and TIM Holdings alluded to the norm since the first period analyzed. Contributions of the Study: It’s a current topic in accounting research because it’s the year of implementation of CPC 47, and relevant, as it will bring significant changes in the recognition and disclosure criteria of revenues. From the literature review, few studies have been done dealing with the topic. From this, this research sought to contribute to expand the list of works produced on the new CPC, with a quantitative approach, in the lines of accounting disclosure and regulation.

Potential of IFRS 8: Managerial "customization", relevance of subsidiaries and separate financial statements

2018 ◽  
pp. 103-131
Author(s):  
Andrea Cuccia
Keyword(s):  
Information Needs ◽  
Balance Sheet ◽  
Financial Statements ◽  
Management Approach ◽  
Economic Activities ◽  
Consolidated Financial Statements ◽  
Segment Reporting ◽  
Planning And Control ◽  
Ifrs 8 ◽  
Reporting Structure

Nowadays companies are engaged in an increasingly competitive and global arena, where informational imbalances between companies and investors might be seen as a constraint to the correct functioning of markets. Breakdown of infor-mation by segments might be seen as an attempt to intercept different information needs about each circumscribed area of economic activities individually identified within entity-group. This paper is first intended to figure out, by resorting to practical examples, the effects of full management approach on IFRS 8 segment reporting structure. Then, in the light of the state of art arising from IFRS 8 Post-Implementation Review and the latest criticisms, in order to guarantee its useful-ness, it calls for a more awareness of the multi-faceted nature of segment reporting as a planning and control tool. Besides, merit of segment reporting is to recovery subsidiaries data elided within the consolidated financial statements. Following this perspective, separate financial statements, depicting subsidiaries in terms of in-vestments and profits and losses flowing respectively into balance sheet and in-come statements, is bound to provide a synthetic overview of all the business areas occupied by entity-group.

scholarly journals Case Study: Consolidated Balance Sheet At Date Of Purchase

2016 ◽  
Vol 13 (1) ◽  
pp. 1-4
Author(s):  
Peter Harris ◽  
Petra Dilling
Keyword(s):  
Balance Sheet ◽  
Financial Statements ◽  
Consolidated Financial Statements ◽  
Consolidation Process ◽  
Actual Case ◽  
Global Expansion ◽  
Depth Analysis

Consolidated financial statements have gained great popularity over the last decade with the resurrection of acquisitions and the increased global expansion of business. This case study provides an actual case study of the preparation and presentation of a Consolidated Balance Sheet on the date of acquisition. An in-depth analysis is provided as to how to value the acquired entity, how to calculate Goodwill and how to measure the Non-Controlling interest portion. Work paper and adjusting entries are also highlighted to help facilitate the consolidation process.

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