高级会计学（第10版）教师手册 Beams10e-IM

Chapter3

ANINTRODUCTIONTOCONSOLIDATEDFINANCIALSTATEMENTS

ChapterOutline

ABUSINESSCOMBINATIONISCONSUMMATEDWHENONECORPORATION

ACQUIRESOVER50%OFTHEOUTSTANDINGVOTINGSTOCKOFANOTHER

CORPORATION

AAcorporationthatholdsamajorityinterest(over50%)ofthevotingstockofanother

corporationisreferredtoastheparentcompany.

BTheinterestnotheldbytheparentcompanyisreferredtoasthenoncontrollinginterest.

CAcorporationwhoseoutstandingvotingstockisover50%ownedbyanothercorporation

isasubsidiaryofthatcorporation.

DUnderFASBStatement160,theacquisitionofadditionalsharesofasubsidiaryis

recordedbyanincreaseintheinvestmentaccountandareductionofthenoncontrolling

interest,basedonthecarryingamountofthenoncontrollinginterestattheadditional

acquisitiondate.APICisadjustedforanydifferencebetweenthepriceandthecarrying

amount.

ETheparentcompanyandsubsidiaryexistasseparatelegalentitiesandmaintain

separateaccountingrecords.However,eachreportingperiodtheirseparate

accountingrecordsarecombinedintoonesetofconsolidatedfinancialstatements

forreportingthefinancialpositionandresultsofoperationsofaconsolidatedreporting

entity.

1Consolidatedfinancialstatementsarepreparedforallthecompaniesunder

thecontrolofasinglemanagementteamtoreflectasinglereportingentity

withmultipledivisions.

2Thepurposeofconsolidatedfinancialstatementsistopresentfairly,primarily

forthebenefitoftheownersandcreditorsoftheparentcompany,theresultsof

operationsandthefinancialpositionofaparentandallitssubsidiariesasifthe

consolidatedgroupwereasingleentity.

3Thesubsidiarywillcontinuetoreporttheresultsofitsseparateoperations

toitsnoncontrollingstockholders.

4Theconsolidatedentity(thereportingentity)hasnotransactionsandit

doesnotmaintainaledger.Thefinancialstatementsoftheseparatelegal

entitiesarecombinedonlyforexternalreportingpurposes.

CONSOLIDATIONPOLICY

AUndertheprovisionsofFASBStatementNo.94,"ConsolidationofAllMajority-Owned

Subsidiaries/consolidationisrequiredforallcorporationsthatareover50%owned

except:

1Wherecontrolislikelytobetemporaryor

2Wherecontroldoesnotrestwiththemajorityownership,suchaswhena

subsidiaryisinbankruptcyoroperatesunderforeignexchangerestrictions,

controls,orothergovernmentallyimposeduncertaintiessoseverethattheycast

doubtontheparent'sabilitytocontrolthesubsidiary.

PARENTANDSUBSIDIARYWITHDIFFERENTFISCALPERIODS

AConsolidatedstatementsarepreparedforandasoftheendoftheparentcompany's

fiscalperiod.

CONSOLIDATEDFINANCIALSTATEMENTS

AAsetofconsolidatedfinancialstatementsincludesaconsolidatedbalancesheet,a

consolidatedincomestatementandretainedearningsstatement,andaconsolidated

statementofcashflows.

BTheconsolidatedbalancesheet,incomestatement,andretainedearningsstatementare

preparedbycombiningtheseparatefinancialstatementsoftheparentcompanyand

thesubsidiary.

CTheconsolidatedcashflowstatement,however,ispreparedfromtheconsolidated

financialstatementsfortwoconsecutiveyears.

THECONSOLIDATEDBALANCESHEET

ATheinvestmentinsubsidiaryaccountontheparentcompanybalancesheetandthe

stockholders'equityaccountsonthesubsidiary'sbalancesheetarereciprocal,both

representingthenetassetsofthesubsidiary.

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1Thereciprocalinvestmentinsubsidiaryandsubsidiarystockholders9equity

accountsareeliminatedinconsolidation(andarereplacedbytheindividual

assetsandliabilitiesofthesubsidiary).

aAone-lineconsolidation(theinvestmentaccount)asdiscussedin

Chapter2isreplacedbydetailsaboutindividualassetsandliabilities

controlledbyasinglemanagementgroup

2Non-reciprocalaccountsarecombined.

3Reciprocalaccountsareofteneliminated.

BThecapitalstockandretainedearningsamountsthatappearintheconsolidated

balancesheetarethoseoftheparentcompany.

CUnamortizedcost-bookvaluedifferentialsareaddedto(orsubtractedfrom)the

assetandliabilityaccountsthatwillappearintheconsolidatedbalancesheet.

Goodwillfromtheinvestment,whichdoesnotappearintheseparatecompany

statements,isaddedtotheassetlisting.

DIntercompanybalancesareeliminated.

E100%oftheassetsandliabilitiesoftheparentcompanyandsubsidiaryareshown

intheconsolidatedbalancesheet,andanynoncontrollinginterestinthesubsidiary's

netassetsisreportedseparatelyintheliabilityorthestockholders9equitysection.

1Noncontrollinginterestiscomputedasthenoncontrollinginterestownership

percentagetimesthesubsidiaryequityatthebalancesheetdate.

2Classificationofnoncontrollinginterest:

aInpractice,noncontrollinginterestisusuallyshownasaseparate

itemintheliabilitysectionofaconsolidatedbalancesheet.

bConceptually,noncontrollinginterestshouldappearasaseparate

componentofstockholders9equitybecauseitrepresentsanequity

investmentintheconsolidatednetassets(Allofthesub'sassetsand

liabilitiesareconsolidated,eveniftheparentonlyowns50+%.The

noncontrollinginterestrepresentsthesub'sothershareholders,interestin

itsnetassets.).

cTheFASBwilllikelyrequirefirmstotreatthenoncontrollinginterestas

equitywhentheyissuearevisiontoSFASNo.141.

WORKINGPAPERS

AWorkingpapersprovideaconvenientwaytoorganizetheinformationneededto

prepareconsolidatedfinancialstatements.

BWorkingpaperadjustingandeliminatingentriesarenotrecordedintheledgersof

eithertheparentcompanyorsubsidiary.

CCost-bookvaluedifferentialsarenotrecordedonthebooksoftheparentcompany

oritssubsidiary,andthereforetheymustbeenteredintheworkingpaperstoadjust

thesubsidiary'sbookvaluestothenewcostbasisfbrconsolidatedstatementpurposes.

1TheamountsassignedtoidentiHableassetsandliabilitiesareforthefair

valueandbookvaluedifferencebecausethepricepaidbytheparent

company/investorimpliesaninvestmentpricefor100%oftheinvestment.This

istheentitytheoryunderFASB160.

2Thenoncontrollinginterest'sshareofthesubsidiary'sassetsandliabilities

isnowalsorevaluedundercurrentGAAP.

3Theassetandliabilityamountsthatappearintheconsolidatedbalancesheetare

determinedbycombiningtheseparateparentcompanyandsubsidiaryfinancial

statementamounts(bookvalue)withthedebitandcreditamountsenteredinthe

adjustmentandeliminationcolumns.

4Ifseveralassetandliabilityaccountsareaffectedbycost-bookvaluedifferentials,

theuseofan“unamortizedexcess“accountsimplifiestheprocessofentering

thecost-bookvaluedifferentialsintheworkingpapers.Theunamortizedexcess

accountdoesnotaffecttheconsolidatedfinancialstatementsbecauseithasequal

debitandcreditentriesintheadjustmentandeliminationcolumns.

5Themajoreliminationentryatacquisitioninvolveseliminationoftheinvestment,

thestockholders9equityaccountsofthesubsidiary,recordingoftheexcessand

recordingofthenoncontrollinginterest.

OBSERVATIONS

AUnderFASB160consolidatednetincomeisthenetincomeoftheconsolidatedgroup.

Theconsolidatedincomestatementmustclearlyseparateincomeattributabletothe

controllingandnoncontrollinginterests.

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BUndertheequitymethod,theparentcompany'sincomestatementshowsrevenuesand

expensesoftheparentcompanyandinvestmentincomefromthesubsidiary.

CTheconsolidatedincomestatementshowsthetotalrevenuesandexpensesofthe

parentcompanyandsubsidiary(adjustedforamortizationofthecost-bookvalue

differentials)andanallocationasnotedabove.

DTheobjectiveofaconsolidatedincomestatementistoshowtheincomeofaparent

companyanditssubsidiariesasiftherewereasingleentity.

PUSH.-DOWNACCOUNTING

APush-downaccountingisbasedontheassumptionthatthepurchaseofthevotingstock

ofanothercompanycreatesanewcostbasisfortheassetsandliabilitiesofthe

purchasedcompany.

BPush-downaccountingaffectsthesubsidiary'sseparatebooksandfinancial

statements,butitdoesnotaffectconsolidatedfinancialstatementamounts.

1Cost-bookvaluedifferentialsarerecordedonthebooksofthesubsidiary

(i.e.,pusheddowntothesubsidiary'saccounts).Attheacquisitiondate:

aTheparentcompanyrecordsitsinvestmentasusual.

bThesubsidiarymakesanentryonitsownbookstorecordthenew

assetbases,includinggoodwill,andreclassifiesretainedearningsto

push-downcapital.

2Thebalancesheetsoftheparentcompanyandsubsidiaryareconsolidatedby

eliminatingtheinvestmentinsubsidiaryaccountagainstthesubsidiary'scapital

stockandpush-downcapital.

CTheSECrequirespush-downaccountingforSECfilingswhenasubsidiaryis

substantiallywhollyownedandhasnopublicdebtorpreferredstockoutstanding.

NEWSTANDARDS

1)FASBStatementNo.141r-BusinessCombinations

a)Poolingofinterestsiseliminated.

b)Specificintangiblesshouldberecognizedapartfromgoodwilliftheymeet6

oneofthefollowing:

1.contractual-legalcriterion

Z.separabilitycriterion

2)FASBStatementNo.157-FairValueMeasurements

a)Newdefinitionsareprovidedforfairvaluesasarenewmethodstomeasure

it.Exchangepricenotionisapplied.Fairvalueisamarket-based

measurement.Assumptionsdoincluderisk.

b)Expandeddisclosuresarerequired.

c)Thisstatementappliesforderivatives.

3)FASBStatementNo.160-NcmcontroHineInterestsinConsolidatedFinancial

Statements-anamendmenlefARBRo.51

a)Noncontrollinginterestispartofequity.

b)Theacquisitionmethodforrecordingbusinesscombinationsand

subsequentlyissuingconsolidatedflnancialstatementshasbeenadopted.

Theentitytheoryofconsolidationsisused.Allassetsandliabilitiesofthe

subsidiarywillbereportedusingfairvaluesatthecombinationdate,based

onthepricepaidbytheparentforitscontrollinginterest,evenwhenthe

parentacquireslessthan100%interest.Thus,boththecontrollingand

noncontrollinginterestswillbereportedbasedonfairvaluesatthe

acquisitiondate.

c)SeeaboveOBSERVATIONSsection,partA.

d)Theconceptoffinancialcontrol,ratherasimplemajorityownershipofa

subsidiary9outstandingvotingshares,isapplied.

e)Changesinequityinterestsareequitytransactions.

f)Aparentshouldrecognizeagainorlosswhenasubsidiaryis

deconsolidated.

g)Expandeddisclosuresarerequired.

DescriptionofassignmentmaterialMinutes

Questions(18)

Exercises(10)

E3-16MCgeneralquestions12

E3-27MCgeneralquestions15

E3-3AICPA6MCproblem-typequestions3()

E3-4[Pina/SantaMaria]Correctionofconsolidatednetincome15

E3-5[Panderman/Sadisman]Disclosureofconsolidateddividends10

E3-6[Portal/Slider]Preparejournalentriesandbalancesheetunderpush­20

downaccounting

E3-7[Pasture/SituationSpecialists!Prepareconsolidatedincomestatementswithout20

andwithcost-bookvaluedifferentials

E3-8[Poball/Softcan]Calculateconsolidatedbalancesheetamountswith15

goodwillandminorityinterest

E3-9[Paskey/Salam]Preparestockholders9equitysectionofconsolidated18

balancesheetoneyearafteracquisition(withgoodwill)

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E3-10[Peekos/Slogger]Prepareconsolidatedincomestatement3yearsafter20

acquisition(withexcessallocatedtoinventories,equipment,andgoodwill)

Problems(15)

P3-1[Pennyvale/Sutherland]Prepareaconsolidatedbalancesheetatacquisition22

(withintercompanyaccountbalance)andcomputeconsolidatednetincome

oneyearlater

P3-2[Parlor/Setting]Allocationscheduleforcost-bookvaluedifferentialand25

consolidatedbalancesheetatacquisition

P3-3[Pj/SoftbackBooks]Prepareallocationschedulewithbookvaluegreaterthan20

fairvalue.

P3-4[Pharm/Specht]Givenseparateandconsolidatedbalancesheets,reconstruct15

thescheduletoallocatethecost-bookvaluedifferential

P3-5[Palmer/Sorrel]Prepareaconsolidatedbalancesheetoneyearafter20