Consolidation -- Q No-1 on sales and Q No-2 on equity

UK Discussion in 'Technical Queries' started by hamid526, Dec 19, 2018.

  1. hamid526

    hamid526

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    Question-1

    There are three Companies. A, B and C.

    C is 100 owned by B and B is 100% owned by A.

    The sale of Company C is consolidated in B, however, when company B is consolidated in A, Company C sales is excluded. Is it possible under IAS. Please provide IAS number and text as a reference.

    Question-2

    Company B is 100% owned by company A. Both companies are based in different countries.

    Company B equity is 236 million, however, company A is showing investment at 183 million. they told us that this is due to exchange rate. Is it possible under IAS. Please provide IAS number and text as a reference.

    Kind regards
     
    hamid526, Dec 19, 2018
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  2. hamid526

    Becky Administrator

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    Is this a study question?
     
    Becky, Dec 19, 2018
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  3. hamid526

    hamid526

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    No Practical situation
    No practical situation
     
    hamid526, Dec 19, 2018
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  4. hamid526

    kirby VIP Member

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    Q1 if company B’s sales are 100% with A and B, then C will have no sales in Consolidated A
     
    kirby, Dec 19, 2018
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  5. hamid526

    kirby VIP Member

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    Q2. Need more info. Are the amounts shown for both A and B stated in the same currency?
     
    kirby, Dec 19, 2018
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  6. hamid526

    hamid526

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    Company C sales was included in Company B consolidation, however, in Company A consolidation, Company C sales was excluded which was part of Company B consolidation.
     
    hamid526, Dec 19, 2018
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  7. hamid526

    bklynboy VIP Member

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    Is company C selling to Company A? If so that's why its excluded from A but left in B. Need to be more specific who is selling to whom.
     
    bklynboy, Dec 19, 2018
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  8. hamid526

    hamid526

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    All sales of Company C and B are to outside customers. Company C has no direct connection with company A in any regard.
     
    hamid526, Dec 20, 2018
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  9. hamid526

    hamid526

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    Dear Mr. Kirby - thanks for your reply.
    Both company's Financial Statements are reported in Currency 'RMB'.
     
    hamid526, Dec 20, 2018
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  10. hamid526

    bklynboy VIP Member

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    I am lost. Unless when you are consolidating B in A you also consolidate C in A so it would count C sales twice which is why you have to eliminate one. Other than this I give up.
     
    bklynboy, Dec 20, 2018
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  11. hamid526

    kirby VIP Member

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    Given that sales from A, B and C are all to outside customers, then the sales for the consolidated company MUST include the sales from C. If not then someone is posting an incorrect consolidating adjustment .So look at the consolidating worksheets to see where this is happening.
     
    kirby, Dec 21, 2018
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