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How do you you account for a parent and subsidiary amalgamation?
Wiki User
∙ 11y ago
Sales between parent and subsidiary is not a real sales. Therefore, its eliminated at end of the year to show actual profit/loss from the sales.
Wiki User
∙ 11y ago
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What is a subsidiary account?
A subsidiary account is an account that is found in the subsidiary ledger. It is used to summarize the control account.
What is an ultimate parent company?
An ultimate parent company considered as a parent company of a subsidiary entity, and the subsidiary entity has its subsidiary entity.
What is Differential between upstream and downstream inter-company transaction?
downstream from parent to subsidiary upstream from subsidiary to parent
When smaller companies are owned and controlled by larger parent company they are what of what parent company?
They are "a subsidiary."They're called subsidiary companies.
How do you record the merger of a subsidiary into its parent when the investment in the subsidiary exceeds the book value of the subsidiary?
Unfortunately you have to record it as a loss to the parent company. Or it will at least show as a loss on the financial statements.
What will happen to a parent bank account if child files for bankruptcy?
The subsidiary can enter into CH11 bankruptcy protection while the parent can remain outside bankruptcy and continue as a going concern. It depends on distribution of the assets and debt tied to both the parent and the subsidiary that can allow the subsidiary to enter into CH11 protection (insolvency where L > A) and be protected by the automatic stay priveleges the federal courts afford, while the parent will continue under its normal course of business and have to make its lenders and creditors whole.
Can a subsidiary company have a separate board of directors from the parent company?
A subsidiary company definitely can have its board of directors, and practically, it usually have. Basically its parent company who appoints directors in board of directors of subsidiary companies. Day to day matters of the subsidiary company cannot be run by parent company's board of directors, so it is necessary for a subsidiary to have its own board of directors which ultimately reports to parent company's board of directors.
What is equity earnings?
Also called indirect, unreported, or undisclosed earnings, that part of the surplus earnings of a subsidiary company, over and above dividend payments, not reported by the parent company. Most of the large corporations hold or control through full, majority, joint (half, third, quarter, etc.) or minority stock ownership in subsidiary is or affiliated companies. Unless the ownership of such subsidiary is a majority interest, the parent company cannot under proper accounting principles consolidate the earnings of a subsidiary or subsidiaries in the income account of the parent company, but only such part of such earnings as may be actually paid to the parent organization as dividends. When earnings of subsidiaries are consolidated in the income account of the parent organization, the proportion of earnings applicable to the minority interest must be deducted.
What determines a wholly owned subsidiary?
A wholly owned subsidiary can be owned by a parent company. When a company is owned by a parent company 100 percent, a wholly owned subsidiary can be established to retain complete control and ownership
What is meant by consolidated profit and loss?
When there is a parent and subsidiary companies exists in that situation the combined financial information of parent company as well as subsidiary companies are shown under one statment which are called consolidated financial statements so in consolidated profit and loss account combined information of both parent and subsidiaries shown together rather preparing separate statements.
What is meant by profit and loss?
When there is a parent and subsidiary companies exists in that situation the combined financial information of parent company as well as subsidiary companies are shown under one statment which are called consolidated financial statements so in consolidated profit and loss account combined information of both parent and subsidiaries shown together rather preparing separate statements.
What do you call a company that owns another company?
A company that owns another is a Parent Company, while the one that is owned by another is a Subsidiary. The Subsidiary may be fully owned or partly owned. To qualify as a Subsidiary, the Parent must hold at least 25% of the shares of the Subsidiary.
