BUS 420 Lecture Notes - Lecture 3: Historical Cost, Financial Statement, Income Statement
28 Dec 2018
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Document Summary
This chapter focuses on preparing the consolidated statement of comprehensive income, retained earnings statement, and statement of financial position at fiscal year-ends after the date of acquisition. Please note that intercompany bondholdings is not very common in practice and would not be covered. This chapter concludes the preparation of consolidated financial statements in the periods subsequent to acquisition. The following major topics are covered in this chapter: elimination of intercompany unrealized profit on depreciable assets, consolidated financial statements in the periods subsequent to acquisition when there is intercompany unrealized profit on depreciable assets. Chapter outline: elimination of intercompany unrealized profit on depreciable assets. Parents and subsidiaries engage in more complex transactions such as intercompany transfers of depreciable assets. Parents and subsidiaries often redistribute depreciable and non-depreciable assets among themselves, for a variety of reasons including management, income tax, and corporate restructuring. Such transactions usually are recorded at the market value of the assets transferred:
