Notes Term Paper Example | Topics and Well Written Essays - 1000 words

Notes - Term Paper Example An effort has been made to present notes that have practical implications. Notes of a fictitious company are as under: 1. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as applicable to UK, and the Interpretations of International Financial Reporting Standards (IFRIC). Principal financial accounting and valuation methods used to prepare consolidated financial statements are set out in each of the following sections. The accounting methods are generally unchanged as compared to the previous year. 4. The consolidated financial statement includes the financial statements of the Principal and the group companies in which group holds stake (its subsidiaries) until 31st December of each year. Majority stakes of the group deem to exist if the group can determine the financial and managerial policies of a subsidiary in order to obtain economic advantages. a. In case of acquisition of a company, the capital is consolidated using acquisition method. The assets and liabilities of respective subsidiaries are valued at market value attributable at the time of acquisition. If the acquisition costs exceed the attributable current market value of the acquired identifiable assets and liabilities, the capitalised difference is shown as goodwill; otherwise it is immediately adjusted against income. The Non- Controlling interests are reported as part of the current values of the stated assets and liabilities corresponding to their respective interests. d. The earnings as well as assets and liabilities of associated companies are incorporated in this consolidated financial statement using the equity method of accounting. Interests in associated companies are given in SFP as acquisition costs adjusted by changes in the group share of net income following acquisition, and losses due to depreciation. Losses that exceed the