No. You need to now add the 2 companies together to get the value of the whole operation. There may be goodwill or intangibles involved and acquisition is at FV so need to understand all these aspects including push down accounting. It can get complex. Do you have a specific issue you are struggling with?
Thank you. We did process the acquisition at FV on the books of the parent company. Now we need to present consolidated financial statements. I took care of the eliminations and was just wandering if anything related to the acquisition should get eliminated. I appreciate your help. We have already done the push down accounting and now we need to present consolidated financials. For instance the account "Investment in Affiliates" on Parent company's books, does it get eliminated in consolidation?
Any inter-company items should be eliminated. If the investment in affiliates represents the net equity of the sub then Yes its eliminated since you will bring in the subsidiary individual line by line. Otherwise you are double-counting the assets. The investment in subsidiary is also showing up in unrealized gains, net income and possibly CTA if a foreign company. The idea is to take off the parent any values it recorded that reflect the subsidiary valuation and then bring in the subsidiary line by line. Be careful if you own less than 100% as it may need to be 100% consolidated but you have a non controlling interest to account for.