What is the purpose of consolidation entries. Should we we delete certain accounting transactions before consolidated accounts are prepared. If this is true, why we are deleting transactions from our records. And more importantly, why are we wasting money recording these transactions in the first place. Please provide a couple of simple examples to support your views on this issue.

 If company is currently reviewing several proposals whereby we are considering investing in other companies. For example, one proposal is to buy 20% of a QLD-based company (a private company). And there is another proposal where we already own 35% of a WA based company, and we are considering buying another 35%. 

Would you be able to please shed some light on how to account for these investments in our accounting records? 

The last issue is something which the external auditors raised to our audit committee. Goodwill is the value associated with the business name, and therefore the value is decided by the board. If a business is very well known with the community, then the company can recognise goodwill in its books - after consulting with some business valuation experts. Is that correct? What is goodwill, and when it should be recognised?

 How do we use this goodwill? Should we just depreciate it? 

Answer rating: 100% (QA)

Consolidation entries are used to combine the financial statements of multiple entities that are under common control into a single set of financial s... View the full answer