till yesterdat i thought i was good at consilidations... but i did the final exam today ..and now i think i don know rt..

when u consolidate ...the balance sheet of the parent ans subsidiary..

u do not take retained earinings for sub rt????

but u take the income rt ? from the date of consolidation...

but how much

u take it full ... or ur share....

i have seen they have done in diff ways ... can sumbody exaplain how do u take the income of subsidiary in consolidation

question is for anyone please help

is  there a change to consolidation for the latter half of 2009??

jrupa wrote: soo that means that in income statement u show parent and subsidiary's income in incoem statement . and in balance sheet u take only parent companys share to RE rt and eliminate RE of subsidiary

See it this way:-

We know in purchase method, I/S and BS of "subsidiary" is consolidated from the date of purchase.

We know, ending RE = Beg RE + NI - dividends declared

"beginning RE of subsidiary" would not be consolidated/ included in parent's consolidated statements.

Net Income from date of purchase would be included in consolidated statements. And, as Sanjana mentioned above, income statement of both parent & subsidiary are combined and in BS, minority interest, if any is presented separately in consolidated statements.

Dividends would be treated like inter-co receivables/payables.

Thus, to cut short; don't include "ending RE of subsidiary" in parent's consolidated BS. We would be including NI as above. This way we include NI after the date of purchase and exclude RE at the date of purchase.

Refer page F3-27 for more info on "minority interest"