Consolidating entries

08-Aug-2018 06:28

There is an audit adjustment between a foreign sub in Euro and the US parent for the intercompany accounts, a note payable and the retained earnings account done at .

Perhaps that was recommended by the auditors for consolidation/reporting purposes but I thought these intercompany elimination entries were only done on consolidating worksheets.

The first type is the elimination of inter-company stock ownership.

My understanding from what you've said is that perhaps the Auditors recommended the adjustments in the Parent's books?Under the Halsbury's Laws of England, 'amalgamation' is defined as "a blending together of two or more undertakings into one undertaking, the shareholders of each blending company, becoming, substantially, the shareholders of the blended undertakings.There may be amalgamations, either by transfer of two or more undertakings to a new company, or to the transfer of one or more companies to an existing company".Which method to use depends on how much it actually owns.

Generally accepted accounting principles requires a company to use consolidated accounting when it owns a controlling stake in another business.It depends on the nature of the adjustment; if it goes to a real adjustment account that you track, then you should leave it, as you'll need to keep making that adjustment as it changes.

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