es, as well as for domestic, if they used different accounting policies from the policy of the parent company.point - the conversion of balance sheet items of foreign operations are consolidated into the currency of the parent company .
2.2 Procedure for consolidation
would be wrong to think that consolidation - it is a simple summation of articles reporting the parent and its subsidiaries., in fact, is the substitution statements of the parent company, "the book value of investments" ; in each subsidiary of the fact that these investments are really at the moment, that is, the share of the parent company in the fair value of the net assets of the subsidiary at the balance sheet date and the remainder arising on acquisition investments. Consolidation should provide an exception again of mutual operations of the companies of the group.consolidated data reporting statements of the parent company and its subsidiaries are combined in stages, to present them as a single economic organization. To this end, first summarize the articles itemized statements of the group and then exclude mutual investments and operations. In general, this can be represented as follows:
Investment costs are eliminated investor equity invested enterprises;
Remains outstanding under Intercompany transactions, such as intercompany sales, expenses, loans, dividends, are eliminated in full;
Unrealized gains on transactions among the remnants of goods and fixed assets are eliminated in full;
Unrealized losses on intra-fund transactions in assets are also eliminated;
Net profit attributable to outside (minority) shareholders of a subsidiary (minority interest) is reported separately from the profit attributable to the parent company;
In the consolidated financial statements should also highlight the minority interest in the net assets (or equity). consolidated balance sheet is particularly important procedure for consolidation of debt. From a legal point of view, concern (a group of) can not have a loan or debt relative to itself. Therefore, loans and other debt, contributions to the reserve fund and debt between companies belonging to the group, should be excluded. [13] applies to the following balance sheet items:
Outstanding contributions to the share capital;
Payments for commercial transactions;
Loans granted to the Group;
Long-term investments;
Promissory notes;
Other debt;
Short-term financial investments.investments of the parent company in its subsidiaries and the share attributable to the parent company in the equity of subsidiaries.accounts of the subsidiary to be consolidated:
