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When preparing a group statement of financial position the assets and liabilities of the parent and the subsidiary are subject to consolidation adjustments and then added together. For example, as the objective of the exercise is to prepare the group statement of financial position as if the group.
This article discusses and shows both ways of measuring goodwill following the acquisition of a subsidiary, and how each measurement of goodwill is subject to an impairment review.
If you struggle with Groups, read Tom Clendon’s guide to Group accounts Consolidation is hugely important but you can’t pass the exam on this alone – a significant number of marks in the consolidation tests your understanding of other accounting standards.
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