A new employee has been given responsibility for preparing the consolidated financial statements of Sample Company. After attempting to work alone for some time, the employee seeks assistance in gaining a better overall understanding of the way in which the consolidation process works. You have been asked to assist in explaining the consolidation process.
- Why must the eliminating entries be entered in the consolidation worksheet each time consolidated statements are prepared?
- How is the beginning-of-period non-controlling interest balance determined?
- How is the end-of-period non-controlling interest balance determined?
- Which of the subsidiary’s account balances must always be eliminated?
- Which of the parent company’s account balances must always be eliminated and why must they be eliminated?
- How might this process under a GAAP basis compare to that under an IFRS basis?
- Are there any ethical aspects that need to be addressed?
Reminder: Your initial posting should be 250-500 words and must be submitted by Thursday, 11:59 p.m. MST of this week. Also, by 11:59 p.m. MST of Sunday of this week, respond to at least two of your classmates or instructor, in any of the following ways: