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preference share capital in subsidiary irredeemableinvestment in preference shares does not lead to ownership and therefore if the holding company
profits in subsidiary companythe remaining profits that belong to the holding company should be split between pre-acquisition profits and post
group retained profitsretained profits ideally should be the amounts that can be distributed as dividends therefore in arriving at group retained
minority interest miwhen the holding company owns less than 100 of the ordinary share capital of the subsidiary company then the other balance is
good will on consolidation good will on consolidation arises when the purchase consideration paid by the holding company is different from the value
consolidated balance sheetthe consolidated balance sheet involves adding assets and liabilities of the subsidiary to those of the holding company
consolidated acccounts1as 27 therefore requires that the holding a company should include the financial results of the subsidiary company in its own
subsidiary companies 1as 27a subsidiary company is a company in which the investing company also called holding or parent company controls the
illustration for preparing final accountsk ltd established a branch in arusha tanzania on 11x2 when kshs 1 tshs 15 ppe costing kshs 800000 were
steps for preparing final accountsthe following steps should be followed in preparing the final accounts where we have a foreign branch1 update the
presentation method formerly closing rate or net investment methodunder this method the branch operates with a lot of degree of autonomy from the
the functional currency method formerly temporal methodunder this method the branch is considered to be an extension of the head office and this is
foreing branchesthe head office my set up a branch in a foreign country ias 21 requires that the results of that foreign branch to be
illustration regarding profit that head office can claime ltd sets up a branch in nyeri on 1 july 2001 goods are sent to branch at an invoice price
illustration of double entrythe balances on the current accounts of a head office and branch were ksh 698000 before the transactions listed below
basics of sundry matterscurrent accounts balances must always be equal and oppositethe head office current account in the branch books should always
final accounts1 examination questions ndash two types of problems arise in examinationstransfers between head office and branch are made at cost
accounts required and their purposea branch current account head office booksrecords all transactions branch and head officethe balance represents
legal aspectsthere is no law relating to branch accounts but examination problems under this heading are frequently linked to either partnership or
mark upmark up is defined as the rate of gross profit to cost of salesmark up gross profit cost
sundry matters 1 the accounting system is also appropriate for departmental accounts2 the branch stock account is a practical means of controlling
illustration of head office recordsin order to provide a check that branch managers and staff deal properly with goods and cash passing through their
system one-the head office maintains all the accountsthis system is suitable for an enterprise that has small branches possibly in another area of
how accounting objectives can be achievedthere are two main ways by which this can be achievedall the accounting records are maintained at the head
accounting objectivesaccounting has two main objectivesto assist control over the assets and liabilities and the income and expenditure of the