FAC 3704
GROUP FINANCIAL REPORTING
LEARNING UNIT 3: COMPLEX GROUPS
3.1 HORIZONTAL GROUPS
Parent has more than one subsidiary, represented as follows;
PARENT
SUBSIDARY 1 SUBSIDARY 2
We basically do 2 consolidations.
1. Do two separate unrelated Analyses
2. Consolidate all 3 companies into one statement, combining the two NCIs that arise.
3. SPLOCI
P + S1 + S2
Remember to subtract dividends obtained from respective subsidiary from profit before
tax
4. SCE
Use both analyses to complete.
Remember that dividends paid is ONLY THAT OF THE PARENT
5. SFP
P + S1 + S2
3.2 VERTICAL GROUPS
One or more subsidiaries of the parent has its own subsidiary, represented as follows;
GROUP FINANCIAL REPORTING
LEARNING UNIT 3: COMPLEX GROUPS
3.1 HORIZONTAL GROUPS
Parent has more than one subsidiary, represented as follows;
PARENT
SUBSIDARY 1 SUBSIDARY 2
We basically do 2 consolidations.
1. Do two separate unrelated Analyses
2. Consolidate all 3 companies into one statement, combining the two NCIs that arise.
3. SPLOCI
P + S1 + S2
Remember to subtract dividends obtained from respective subsidiary from profit before
tax
4. SCE
Use both analyses to complete.
Remember that dividends paid is ONLY THAT OF THE PARENT
5. SFP
P + S1 + S2
3.2 VERTICAL GROUPS
One or more subsidiaries of the parent has its own subsidiary, represented as follows;
