Consolidated Financial Statements

The financial statements prepared by an entity in order to record their overall business transactions in a particular year. The recorded transactions are further reflected the financial performance of an entity in which efficiency entity will get improved by adopting each and every principles. The electronic mode has chosen by an entity in order to convey their financial information to all kinds of stakeholder. The Increasing impact of external business environment imposes external pressure on the business which will be helpful for an entity in order to affect the internal business performance.

Define- The control based approach is emphasises on imposing and placing controls in the current system in order to control the performance of an entity in relation to the external threats. On the other hand, inclusive approach is stresses on combing with the current system who emphasises on all the existing transactions by reducing their weaknesses by enhancing their ability.

Mode- The focus of the integrated reporting framework is on the external business environment in which external market threats are taken into consideration. The market threats are observed properly by an entity owner which can be further converted into opportunities for the business. The higher efficiency of an entity will transform the negative reactions of the environment into new market opportunities. The control approach focuses on protecting the interest of the business from the external default by improving the current financial statements. On the contrary, to it the inclusive approach emphasises on strengthening the business performance by enhancing the internal performance of the business in relation to the external market.

Compliance- The control based approach stresses on complying with the rules and regulations framed by external entity to enhance the existing business performance of the current financial statements. The external rules will in turn improves the working conditions of an entity by following different committees such as stock exchanges and other IFRS requirements to be followed by an entity. The inclusive approach stresses on rectifying the existing weaknesses lies in the current system of the business in order to deal with the external market complexities. The stakeholder's needs and the expectations are taken into considerations. The integrity of the business needs to be reflected by the action taken by an entity in order to please their clients in order to maintain long term relationship with them. Get best Finance assignment Help in UK.

PART 1

a) Acquisition analysis and adjustment/elimination journal entries for consolidation at acquisition, 30 June 2010

Acquisition analysis at 30 June 2010

Inventory calculation= Opening-closing= 168000-134000=33600

=33600 (1-30%)= 23520

1. Journal entries at the date of acquisition at the year end 30 June 2010

b) i) adjustment/elimination journal entries for consolidated statements at 30 June 2016

Recognizing good impairment expenses

Goodwill impairment A/c Dr 4000

To Retained earnings   4000

Eliminating intra-group sales

Revenue (Man Ltd) 280000

To Cost of sales 280000

Eliminating unrealized profit in opening inventory

Retained earning a/c Dr 48000

To Opening inventory 48000

(being unrealized profit in opening inventory)

Income tax expense A/c Dr 14400

To retained earnings(48000*30%) 14400

(Being income tax attributable to opening inventory)

Eliminating Unrealized profit in closing inventory

Closing stock A/c Dr(Income statements) 22000

To Inventory(Balance sheet)((280000*25%=70000-48000=22000)) 22000

Tax paid on sale of inventory

Deferred tax asset A/c Dr(22000*30%) 6600

To income tax expenses 6600

Eliminating Intra group dividend

Dividend income 453600

To Dividend paid 453600

ii) Consolidation worksheet

Iii) Consolidated financial statements and statements of changes in equity of Good Ltd and its controlled subsidiary for year ended 30 June 2016

Table 1: Consolidated income statement

Table 2: Consolidated Balance sheet

Table 3: Consolidated changes in equity

PART 2

Effect on revaluation in goodwill on the financial statements

The revaluation in the existing figure of Goodwill is possible in case of acquisition of another company as in that case the value of goodwill will get an increase over the years. The amount of upward revaluation of goodwill will affect the cash flow in positive terms as this will enhance the overall financing activities of the cash flow in order to take long-term liability. If you need cheap dissertation help online from experts that can help you score good grades and impress your professor easily, then we are your one-stop solution. Our experts can deliver the best work before the deadline right to your mail.

The current amount of goodwill which is enhanced after 12 months in the new business of Good Ltd after acquiring man ltd will be taken into consideration as revaluation reserves.

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References

• Harris, P. and Dilling, P., 2016. Case Study: Consolidated Balance Sheet At Date Of Purchase. Journal of Business Case Studies (JBCS). 13(1). pp.1-4.
• Biancone, P., Secinaro, S. and Brescia, V., 2016. Popular report and Consolidated Financial Statements in public utilities. Different tools to inform the citizens, a long journey of the transparency. International Journal of Business and Social Science. 7(1).
• Mates, D., Puscas, A., Ursachi, A. and Ajtay, E., 2016. The influence of accounting system regarding accounting and taxation of entities. Journal of legal studies. 17(31). pp.58-63.
• Johansson, S. E., Hjelström, T. and Hellman, N., 2016. Accounting for goodwill under IFRS: A critical analysis. Journal of International Accounting, Auditing and Taxation. 27. pp.13-25.
• Strebel, P., and et.al., 2016. Competitive profits and the annual report: measuring the sustainable business. Journal of Business Strategy. 37(2). pp.42-49.
• Granof, M. and Bell, S., 2016. A 10-K for the Taxpayer: The Federal Financial Report Provides a Comprehensive Look at the US Government's Financial Metrics and Perspective on Future Issues and Challenges. Journal of Accountancy. 222(4). p.46.
• Malmendier, U., Opp, M. M. and Saidi, F., 2016. Target revaluation after failed takeover attempts: Cash versus stock. Journal of Financial Economics. 119(1). pp.92-106.
• Kabir, H. and Rahman, A., 2016. The role of corporate governance in accounting discretion under IFRS: Goodwill impairment in Australia. Journal of Contemporary Accounting & Economics. 12(3). pp.290-308.

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