Group accounts - SFP

Question 1

What is the first step when producing group accounts?

Answer 1

Establish the group structure

Question 2

What is the second step when producing group accounts?

(after establishing the group structure)

Answer 2

Set out the net assets of the subsidiary at the date of acquisition and the reporting date

Question 3

What is the third step when producing group accounts?

(after establishing the group structure, and setting out the net assets of the subsidiary)

Answer 3

Calculate goodwill on acquisition

Question 4

What is the fourth step when producing group accounts?

(after establishing the group structure, setting out the net assets of the subsidiary, and calculating the goodwill)

Answer 4

Calculate the non controlling interest

Question 5

What is the fifth step when producing group accounts?

(after establishing the group structure, setting out the net assets of the subsidiary, calculating the goodwill, and calculating the non-controlling interest)

Answer 5

Calculate the retained earnings

Question 6

What do you do with any inter-company transactions that occur after the date of acquisition?

Answer 6

Cancel them out from the current assets and current liabilities

Question 7

What do you do with any long term loans between parent and subsidiary that happen after the date of aquisition?

Answer 7

Cancel them out of goodwill and non-current liabilities

Question 8

What do you do with the provision for unrealised profit (PURP)?

Answer 8

Cancel it from inventories and retained earnings