I need an expert tohelp for me. I need excel two docs with both memos and ppt. I need original work. Needed in 8-9 hrs from finance expert.

Will tip 75.

Preparation of Consolidated Balance Sheet Greene Company purchased 60 percent of White Corporation's voting shares on June 3, 2012, at book value. At that date, the of the book value of White Corporation. The companies' permanent accounts on December 31, 2017, contained the following Greene White Company Corporation Cash and Receivables Inventory Land Buildings & Equipment Investment in White Corporation Stock $ Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings $101,000 80,000 150,000 400,000 $20,000 40,000 90,000 300,000 141,000 ________ 872,000 $ $135,000 90,000 200,000 100,000 347,000 $872,000 450,000 $85,000 25,000 90,000 200,000 50,000 $450,000 On January 1, 2013, Greene paid $100,000 for equipment with a 10-year expected total economic life. The equipment was depreciated on a straight-line basis with no residual value. White purchased the equipment from Greene on December 31, 2015, for $91,000. Assume White did not change the remainin White sold land it had purchased for $30,000 on February 23, 2015, to Greene for $20,000 on October 14, 2016. Assume Green Required 1. Prepare a consolidated balance sheet worksheet in good form as of December 31, 2017. 2. Prepare a consolidated balance sheet as of December 31, 2017. ok value. At that date, the fair value of the noncontrolling interest was equal to 40 percent 7, contained the following balances: id not change the remaining estimated useful life of the equipment. ber 14, 2016. Assume Greene uses the fully adjusted equity method. Consolidation Entries Greene Company Cash and Receivables Inventory Land Buildings & Equipment Accumulated Depreciation $101,000 80,000 150,000 400,000 (135,000) Investment in White Corporation Stock Total Assets Accounts Payable Notes Payable Common Stock Retained Earnings White Corporation Dr Cr $0 $0 $20,000 40,000 90,000 300,000 (85,000) 141,000 $ 737,000 $ 365,000 90,000 200,000 100,000 347,000 25,000 90,000 200,000 50,000 $737,000 $365,000 NCI in NA of White Corporation Total Liabilities & Equity $0 $0 Consolidated $0 $0 Greene Company and Subsidiary Consolidated Balance Sheet 12/31/2017 PROJECT INFORMATION: You are a manger in the accounting department of Greene company. Greeneis a rapidly expanding manufacturing company, and is considering some additional acquisitions.The company would like to diversify, and is trying to decide between the two different scenarios outlined in Part 1 and Part 3. To help him make his decision, the Chief Financial Officer would like specific information on how the potential acquisitions would affect financial reporting. ACG4201 Excel Template(1).xlsx COURSE OBJECTIVES COVERED: 1,3,5 PROJECT REQUIREMENTS: This project is split into four (4) parts. Based on your readings, use of technology, research of literature, and other sources do the following: Part 1 - Greene is considering diversifying by purchasing an insurance company and a lumber company. The CFO would like to know how the accounts of these two substantially different subsidiaries would be reported in the consolidated financial statements. Research the Accounting Standards Codification to see what guidance is provided, and prepare a 2 pagememo to the CFOwith your findings. Include in your memo at least two examples of situations in which it may be inappropriate to combine similar-appearing accounts of two subsidiaries. Part 2 - View the attached excel file to prepare a consolidated balance sheet for Greene. Part 3 -In a separate scenario, Greene is investigating purchasing two overseas manufacturing companies that would be included in Greene's consolidated financial statements as wholly owned subsidiaries. One company is located in New Zealand, and the other company is located in Spain. The CFO would like to know what factors need to be considered when determining the functional currency for a consolidated subsidiary. Research the Accounting Standards Codification to see what guidance is provided, and prepare a 2 page memo to the CFO explaining the various economic indicators to be considered both individually and collectively. Part 4 - Present your project to the class for discussion. WRITING REQUIREMENTS: The report should be should be 4-5 pages (not including cover page, abstract, or references) Include the Excel spreadsheet(s) as exhibits in your paper Include a minimum of 3 scholarly sources from the KU Library o All sources used are to be cited in APA format o Please use the writing center if needed TECHNOLOGY/COLLABORATIVE ACTIVITY: You will be using Excel to create the exhibit to your paper You will be presenting your findings from the project to the class using the voice-over feature in PowerPoint or YouTube . Please be sure the audio is clear and the file or link is accessible in the Week 4 Presentation discussion board. You will be collaborating with other classmates on their presentations and answering any questions about your own presentation. Green Incorporation Internal Memo From: Accounting Department Manager To: Chief Finance Officer Subject: Consolidation of Financial Statements of a Parent Company and Subsidiary Company IAS 27 provides guidance on how consolidation of financial statements of the holding company and the subsidiary should be done. Another standard that guides the consolidation of financial statement between the subsidiary and the parent company is SIC 12 which is for special purpose entities. However, IAS 27 is most commonly applied. IAS 27 has two objectives which include the preparation and presentation of consolidated financial statements for a group of entities under the control of a parent; and accounting for investments in subsidiaries, jointly controlled entities, and associates when an entity elects, or is required by local regulations, to present separate (non-consolidated) financial statements ( IAS 27). IAS 27 identify a subsidiary in which the parent company is required to prepare consolidated financial statement using various criteria. Control is presumed when the parent acquires more than half of the voting rights of the entity. Even when more than one half of the voting rights is not acquired, control may be evidenced by power: [IAS 27.13] Over more than one half of the voting rights by virtue of an agreement with other investors, or to govern the financial and operating policies of the entity under a statute or an agreement; or to appoint or remove the majority of the members of the board of directors; or to cast the majority of votes at a meeting of the board of directors. SIC-12 provides other indicators of control (based on risks and rewards) for Special Purpose Entities (SPEs). SPEs should be consolidated where the substance of the relationship indicates that the SPE is controlled by the reporting entity. This may arise even where the activities of the SPE are predetermined or where the majority of voting or equity are not held by the reporting entity. [SIC-12]. A parent is required to present consolidated financial statements in which it consolidates its investments in subsidiaries [IAS 27.9] - with the following exceptions. A parent is not required to (but may) present consolidated financial statements if and only if all of the following four conditions are met: [IAS 27.10] 1. the parent is itself a wholly-owned subsidiary, or is a partially-owned subsidiary of another entity and its other owners, including those not otherwise entitled to vote, have been informed about, and do not object to, the parent not presenting consolidated financial statements; 2. the parent's debt or equity instruments are not traded in a public market; 3. the parent did not file, nor is it in the process of filing, its financial statements with a securities commission or other regulatory organization for the purpose of issuing any class of instruments in a public market; and 4. the ultimate or any intermediate parent of the parent produces consolidated financial statements available for public use that comply with International Financial Reporting Standards. The consolidated accounts should include all of the parent's subsidiaries, both domestic and foreign [IAS 27.12].There is no exemption for a subsidiary whose business is of a different nature from the parent's. There is no exemption for a subsidiary that operates under severe long-term restrictions impairing the subsidiary's ability to transfer funds to the parent. There is no exemption for a subsidiary that had previously been consolidated and that is now being held for sale. However, a subsidiary that meets the IFRS 5 criteria as an asset held for sale shall be accounted for under that Standard. On the other side, Special purpose entities (SPEs) should be consolidated where the substance of the relationship indicates that the SPE is controlled by the reporting entity. This may arise even where the activities of the SPE are predetermined or where the majority of voting or equity are not held by the reporting entity [SIC-12]. Once an investment ceases to fall within the definition of a subsidiary, it should be accounted for as an associate under IAS 28 as a joint venture under IAS 31, or as an investment under IAS 39, as appropriate. [IAS 27.31] The following consolidation procedures should be followed. Intragroup balances, transactions, income, and expenses should be eliminated in full. Intragroup losses may indicate that an impairment loss on the related asset should be recognized [IAS 27.24-25]. The financial statements of the parent and its subsidiaries used in preparing the consolidated financial statements should all be prepared as of the same reporting date, unless it is impracticable to do so [IAS 27.26]. If it is impracticable a particular subsidiary to prepare its financial statements as of the same date as its parent, adjustments must be made for the effects of significant transactions or events that occur between the dates of the subsidiary's and the parent's financial statements. And in no case may the difference be more than three months [IAS 27.27]. Consolidated financial statements must be prepared using uniform accounting policies for like transactions and other events in similar circumstances [IAS 27.28]. Minority interests should be presented in the consolidated balance sheet within equity, but separate from the parent's shareholders' equity. Minority interests in the profit or loss of the group should also be separately disclosed [IAS 27.33]. Where losses applicable to the minority exceed the minority interest in the equity of the relevant subsidiary, the excess, and any further losses attributable to the minority, are charged to the group unless the minority has a binding obligation to, and is able to, make good the losses. Where excess losses have been taken up by the group, if the subsidiary in question subsequently reports profits, all such profits are attributed to the group until the minority's share of losses previously absorbed by the group has been recovered [IAS 27.35]. Reference: "IAS 27 Consolidated And Separate Financial Statements (2008)". Iasplus.com. N.p., 2017. Web. 4 June 2017. Consolidation of Financial Statements of a Parent Company and Subsidiary Company Introduction IAS 27 provides guidance on how consolidation of financial statements of the holding company and the subsidiary should be done. Another standard that guides the consolidation of financial statement between the subsidiary and the parent company is SIC 12 which is for special purpose entities. However, IAS 27 is most commonly applied. IAS 27 has two objectives which include the preparation and presentation of consolidated financial statements for a group of entities under the control of a parent; and accounting for investments in subsidiaries, jointly controlled entities, and associates when an entity elects, or is required by local regulations, to present separate (non-consolidated) financial statements ( IAS 27). Identification of Control IAS 27 identify a subsidiary in which the parent company is required to prepare consolidated financial statement using various criteria. Control is presumed when the parent acquires more than half of the voting rights of the entity. Even when more than one half of the voting rights is not acquired, control may be evidenced by power: [IAS 27.13] Over more than one half of the voting rights by virtue of an agreement with other investors, or to govern the financial and operating policies of the entity under a statute or an agreement; or to appoint or remove the majority of the members of the board of directors; or to cast the majority of votes at a meeting of the board of directors. SIC-12 provides other indicators of control (based on risks and rewards) for Special Purpose Entities (SPEs). SPEs should be consolidated where the substance of the relationship indicates that the SPE is controlled by the reporting entity. This may arise even where the activities of the SPE are predetermined or where the majority of voting or equity are not held by the reporting entity. [SIC-12]. Exceptions to Consolidation A parent is required to present consolidated financial statements in which it consolidates its investments in subsidiaries [IAS 27.9] - with the following exceptions. A parent is not required to (but may) present consolidated financial statements if and only if all of the following four conditions are met: [IAS 27.10] 1. the parent is itself a wholly-owned subsidiary, or is a partially-owned subsidiary of another entity and its other owners, including those not otherwise entitled to vote, have been informed about, and do not object to, the parent not presenting consolidated financial statements; 2. the parent's debt or equity instruments are not traded in a public market; 3. the parent did not file, nor is it in the process of filing, its financial statements with a securities commission or other regulatory organization for the purpose of issuing any class of instruments in a public market; and 4. the ultimate or any intermediate parent of the parent produces consolidated financial statements available for public use that comply with International Financial Reporting Standards. Consolidation procedures 1. Intragroup balances, transactions, income, and expenses should be eliminated in full. Intragroup losses may indicate that an impairment loss on the related asset should be recognized [IAS 27.24-25]. 2. The financial statements of the parent and its subsidiaries used in preparing the consolidated financial statements should all be prepared as of the same reporting date, unless it is impracticable to do so [IAS 27.26]. If it is impracticable a particular subsidiary to prepare its financial statements as of the same date as its parent, adjustments must be made for the effects of significant transactions or events that occur between the dates of the subsidiary's and the parent's financial statements. And in no case may the difference be more than three months [IAS 27.27]. 3. Consolidated financial statements must be prepared using uniform accounting policies for like transactions and other events in similar circumstances [IAS 27.28]. 4. Minority interests should be presented in the consolidated balance sheet within equity, but separate from the parent's shareholders' equity. Minority interests in the profit or loss of the group should also be separately disclosed [IAS 27.33]. Where losses applicable to the minority exceed the minority interest in the equity of the relevant subsidiary, the excess, and any further losses attributable to the minority, are charged to the group unless the minority has a binding obligation to, and is able to, make good the losses. Where excess losses have been taken up by the group, if the subsidiary in question subsequently reports profits, all such profits are attributed to the group until the minority's share of losses previously absorbed by the group has been recovered [IAS 27.35]. Reference: "IAS 27 Consolidated And Separate Financial Statements (2008)". Iasplus.com. N.p., 2017. Web. 4 June 2017. **END** ***THANK YOU*** Green Incorporation Internal Memo From: Accounting Department Manager To: Chief Finance Officer Subject: Economic Factors Influencing the Use of Functional Currency Method The IFRIC received a request for guidance on whether the underlying economic environment of subsidiaries should be considered in determining, in its separate financial statements, the functional currency of an investment holding company. As a result IAS21 was developed- Determination of functional currency of an investment holding company as well as ASC 83010-55-5. IAS21 Paragraphs 9 - 11 provide factors to be considered in determining the functional currency of an entity. Paragraph 12 states that when the 'indicators are mixed and the functional currency is not obvious, management uses its judgement to determine the functional currency that most faithfully represents the economic effects of the underlying transactions, events and conditions'. In addition, paragraph 17 of IAS 21 requires that an entity determine its functional currency in accordance with paragraphs 9-14 of the standard. Therefore, paragraph 9 should not be considered in isolation when determining the functional currency of an entity. Consequently, how an entity applies IAS 21 for the purpose of determining its functional currency - whether it is an investment holding company or any other type of entity - requires the exercise of judgement. IAS 1 Presentation of Financial Statements requires disclosure of significant accounting policies and judgements that are relevant to an understanding of the financial statements. In addition ASC 830-10-55-5 states the following economic factors, and possibly others, should be considered both individually and collectively when determining the functional currency: Cash flow indicators 1. Foreign currency. Cash flows related to the foreign entity's individual assets and liabilities are primarily in the foreign currency and do not directly affect the parent entity's cash flows. 2. Parent's currency. Cash flows related to the foreign entity's individual assets and liabilities directly affect the parent's cash flows currently and are readily available for remittance to the parent entity. Sales price indicators 1. Foreign currency. Sales prices for the foreign entity's products are not primarily responsive on a short-term basis to changes in exchange rates but are determined more by local competition or local government regulation. 2. Parent's currency. Sales prices for the foreign entity's products are primarily responsive on a short-term basis to changes in exchange rates; for example, sales prices are determined more by worldwide competition or by international prices. Sales market indicators 1. Foreign currency. There is an active local sales market for the foreign entity's products, although there also might be significant amounts of exports. 2. Parent's currency. The sales market is mostly in the parent's country or sales contracts are denominated in the parent's currency. Expense indicators 1. Foreign currency. Labor, materials, and other costs for the foreign entity's products or services are primarily local costs, even though there also might be imports from other countries. 2. Parent's currency. Labor, materials, and other costs for the foreign entity's products or services continually are primarily costs for components obtained from the country in which the parent entity is located. Financing indicators 1. Foreign currency. Financing is primarily denominated in foreign currency, and funds generated by the foreign entity's operations are sufficient to service existing and normally expected debt obligations. 2. Parent's currency. Financing is primarily from the parent or other dollar-denominated obligations, or funds generated by the foreign entity's operations are not sufficient to service existing and normally expected debt obligations without the infusion of additional funds from the parent entity. Infusion of additional funds from the parent entity for expansion is not a factor, provided funds generated by the foreign entity's expanded operations are expected to be sufficient to service that additional financing. Intra-entity transactions and arrangements indicators 1. Foreign currency. There is a low volume of intra-entity transactions and there is not an extensive interrelationship between the operations of the foreign entity and the parent entity. However, the foreign entity's operations may rely on the parent's or affiliates' competitive advantages, such as patents and trademarks. 2. Parent's currency. There is a high volume of intra-entity transactions and there is an extensive interrelationship between the operations of the foreign entity and the parent entity. Additionally, the parent's currency generally would be the functional currency if the foreign entity is a device or shell corporation for holding investments, obligations, intangible assets, and so forth, that could readily be carried on the parent's or an affiliate's books. ECONOMIC FACTORS INFLUENCING THE USE OF FUNCTIONAL CURRENCY METHOD Introduction The IFRIC received a request for guidance on whether the underlying economic environment of subsidiaries should be considered in determining, in its separate financial statements, the functional currency of an investment holding company. As a result IAS21 was developed- Determination of functional currency of an investment holding company as well as ASC 830-10-55-5. IAS21 Codification IAS21 Paragraphs 9 - 11 provide factors to be considered in determining the functional currency of an entity. Paragraph 12 states that when the 'indicators are mixed and the functional currency is not obvious, management uses its judgement to determine the functional currency that most faithfully represents the economic effects of the underlying transactions, events and conditions'. In addition, paragraph 17 of IAS 21 requires that an entity determine its functional currency in accordance with paragraphs 9-14 of the standard. Therefore, paragraph 9 should not be considered in isolation when determining the functional currency of an entity. Consequently, how an entity applies IAS 21 for the purpose of determining its functional currency - whether it is an investment holding company or any other type of entity requires the exercise of judgement. IAS 1 Presentation of Financial Statements requires disclosure of significant accounting policies and judgements that are relevant to an understanding of the financial statements. ASC 830-10-55-5 In addition ASC 830-10-55-5 states the following economic factors, and possibly others, should be considered both individually and collectively when determining the functional currency: Cash flow indicators 1. Foreign currency. Cash flows related to the foreign entity's individual assets and liabilities are primarily in the foreign currency and do not directly affect the parent entity's cash flows. 2. Parent's currency. Cash flows related to the foreign entity's individual assets and liabilities directly affect the parent's cash flows currently and are readily available for remittance to the parent entity. Sales price indicators 1. Foreign currency. Sales prices for the foreign entity's products are not primarily responsive on a short-term basis to changes in exchange rates but are determined more by local competition or local government regulation. 2. Parent's currency. Sales prices for the foreign entity's products are primarily responsive on a short-term basis to changes in exchange rates; for example, sales prices are determined more by worldwide competition or by international prices. Sales market indicators 1. Foreign currency. There is an active local sales market for the foreign entity's products, although there also might be significant amounts of exports. 2. Parent's currency. The sales market is mostly in the parent's country or sales contracts are denominated in the parent's currency. Expense indicators 1. Foreign currency. Labour, materials, and other costs for the foreign entity's products or services are primarily local costs, even though there also might be imports from other countries. 2. Parent's currency. Labour, materials, and other costs for the foreign entity's products or services continually are primarily costs for components obtained from the country in which the parent entity is located. Financing indicators 1. Foreign currency. Financing is primarily denominated in foreign currency, and funds generated by the foreign entity's operations are sufficient to service existing and normally expected debt obligations. 2. Parent's currency. Financing is primarily from the parent or other dollar-denominated obligations, or funds generated by the foreign entity's operations are not sufficient to service existing and normally expected debt obligations without the infusion of additional funds from the parent entity. Infusion of additional funds from the parent entity for expansion is not a factor, provided funds generated by the foreign entity's expanded operations are expected to be sufficient to service that additional financing. Intra-entity transactions and arrangements indicators 1. Foreign currency. There is a low volume of intra-entity transactions and there is not an extensive interrelationship between the operations of the foreign entity and the parent entity. However, the foreign entity's operations may rely on the parent's or affiliates' competitive advantages, such as patents and trademarks. 2. Parent's currency. There is a high volume of intra-entity transactions and there is an extensive interrelationship between the operations of the foreign entity and the parent entity. Additionally, the parent's currency generally would be the functional currency if the foreign entity is a device or shell corporation for holding investments, obligations, intangible assets, and so forth, that could readily be carried on the parent's or an affiliate's books. **END** ***THANK YOU*** Green Incorporation Internal Memo From: Accounting Department Manager To: Chief Finance Officer Subject: Economic Factors Influencing the Use of Functional Currency Method The IFRIC received a request for guidance on whether the underlying economic environment of subsidiaries should be considered in determining, in its separate financial statements, the functional currency of an investment holding company. As a result IAS21 was developed- Determination of functional currency of an investment holding company as well as ASC 83010-55-5. IAS21 Paragraphs 9 - 11 provide factors to be considered in determining the functional currency of an entity. Paragraph 12 states that when the 'indicators are mixed and the functional currency is not obvious, management uses its judgement to determine the functional currency that most faithfully represents the economic effects of the underlying transactions, events and conditions'. In addition, paragraph 17 of IAS 21 requires that an entity determine its functional currency in accordance with paragraphs 9-14 of the standard. Therefore, paragraph 9 should not be considered in isolation when determining the functional currency of an entity. Consequently, how an entity applies IAS 21 for the purpose of determining its functional currency - whether it is an investment holding company or any other type of entity - requires the exercise of judgement. IAS 1 Presentation of Financial Statements requires disclosure of significant accounting policies and judgements that are relevant to an understanding of the financial statements. In addition ASC 830-10-55-5 states the following economic factors, and possibly others, should be considered both individually and collectively when determining the functional currency: Cash flow indicators 1. Foreign currency. Cash flows related to the foreign entity's individual assets and liabilities are primarily in the foreign currency and do not directly affect the parent entity's cash flows. 2. Parent's currency. Cash flows related to the foreign entity's individual assets and liabilities directly affect the parent's cash flows currently and are readily available for remittance to the parent entity. Sales price indicators 1. Foreign currency. Sales prices for the foreign entity's products are not primarily responsive on a short-term basis to changes in exchange rates but are determined more by local competition or local government regulation. 2. Parent's currency. Sales prices for the foreign entity's products are primarily responsive on a short-term basis to changes in exchange rates; for example, sales prices are determined more by worldwide competition or by international prices. Sales market indicators 1. Foreign currency. There is an active local sales market for the foreign entity's products, although there also might be significant amounts of exports. 2. Parent's currency. The sales market is mostly in the parent's country or sales contracts are denominated in the parent's currency. Expense indicators 1. Foreign currency. Labor, materials, and other costs for the foreign entity's products or services are primarily local costs, even though there also might be imports from other countries. 2. Parent's currency. Labor, materials, and other costs for the foreign entity's products or services continually are primarily costs for components obtained from the country in which the parent entity is located. Financing indicators 1. Foreign currency. Financing is primarily denominated in foreign currency, and funds generated by the foreign entity's operations are sufficient to service existing and normally expected debt obligations. 2. Parent's currency. Financing is primarily from the parent or other dollar-denominated obligations, or funds generated by the foreign entity's operations are not sufficient to service existing and normally expected debt obligations without the infusion of additional funds from the parent entity. Infusion of additional funds from the parent entity for expansion is not a factor, provided funds generated by the foreign entity's expanded operations are expected to be sufficient to service that additional financing. Intra-entity transactions and arrangements indicators 1. Foreign currency. There is a low volume of intra-entity transactions and there is not an extensive interrelationship between the operations of the foreign entity and the parent entity. However, the foreign entity's operations may rely on the parent's or affiliates' competitive advantages, such as patents and trademarks. 2. Parent's currency. There is a high volume of intra-entity transactions and there is an extensive interrelationship between the operations of the foreign entity and the parent entity. Additionally, the parent's currency generally would be the functional currency if the foreign entity is a device or shell corporation for holding investments, obligations, intangible assets, and so forth, that could readily be carried on the parent's or an affiliate's books. Green Incorporation Internal Memo From: Accounting Department Manager To: Chief Finance Officer Subject: Consolidation of Financial Statements of a Parent Company and Subsidiary Company IAS 27 provides guidance on how consolidation of financial statements of the holding company and the subsidiary should be done. Another standard that guides the consolidation of financial statement between the subsidiary and the parent company is SIC 12 which is for special purpose entities. However, IAS 27 is most commonly applied. IAS 27 has two objectives which include the preparation and presentation of consolidated financial statements for a group of entities under the control of a parent; and accounting for investments in subsidiaries, jointly controlled entities, and associates when an entity elects, or is required by local regulations, to present separate (non-consolidated) financial statements ( IAS 27). IAS 27 identify a subsidiary in which the parent company is required to prepare consolidated financial statement using various criteria. Control is presumed when the parent acquires more than half of the voting rights of the entity. Even when more than one half of the voting rights is not acquired, control may be evidenced by power: [IAS 27.13] Over more than one half of the voting rights by virtue of an agreement with other investors, or to govern the financial and operating policies of the entity under a statute or an agreement; or to appoint or remove the majority of the members of the board of directors; or to cast the majority of votes at a meeting of the board of directors. SIC-12 provides other indicators of control (based on risks and rewards) for Special Purpose Entities (SPEs). SPEs should be consolidated where the substance of the relationship indicates that the SPE is controlled by the reporting entity. This may arise even where the activities of the SPE are predetermined or where the majority of voting or equity are not held by the reporting entity. [SIC-12]. A parent is required to present consolidated financial statements in which it consolidates its investments in subsidiaries [IAS 27.9] - with the following exceptions. A parent is not required to (but may) present consolidated financial statements if and only if all of the following four conditions are met: [IAS 27.10] 1. the parent is itself a wholly-owned subsidiary, or is a partially-owned subsidiary of another entity and its other owners, including those not otherwise entitled to vote, have been informed about, and do not object to, the parent not presenting consolidated financial statements; 2. the parent's debt or equity instruments are not traded in a public market; 3. the parent did not file, nor is it in the process of filing, its financial statements with a securities commission or other regulatory organization for the purpose of issuing any class of instruments in a public market; and 4. the ultimate or any intermediate parent of the parent produces consolidated financial statements available for public use that comply with International Financial Reporting Standards. The consolidated accounts should include all of the parent's subsidiaries, both domestic and foreign [IAS 27.12].There is no exemption for a subsidiary whose business is of a different nature from the parent's. There is no exemption for a subsidiary that operates under severe long-term restrictions impairing the subsidiary's ability to transfer funds to the parent. There is no exemption for a subsidiary that had previously been consolidated and that is now being held for sale. However, a subsidiary that meets the IFRS 5 criteria as an asset held for sale shall be accounted for under that Standard. On the other side, Special purpose entities (SPEs) should be consolidated where the substance of the relationship indicates that the SPE is controlled by the reporting entity. This may arise even where the activities of the SPE are predetermined or where the majority of voting or equity are not held by the reporting entity [SIC-12]. Once an investment ceases to fall within the definition of a subsidiary, it should be accounted for as an associate under IAS 28 as a joint venture under IAS 31, or as an investment under IAS 39, as appropriate. [IAS 27.31] The following consolidation procedures should be followed. Intragroup balances, transactions, income, and expenses should be eliminated in full. Intragroup losses may indicate that an impairment loss on the related asset should be recognized [IAS 27.24-25]. The financial statements of the parent and its subsidiaries used in preparing the consolidated financial statements should all be prepared as of the same reporting date, unless it is impracticable to do so [IAS 27.26]. If it is impracticable a particular subsidiary to prepare its financial statements as of the same date as its parent, adjustments must be made for the effects of significant transactions or events that occur between the dates of the subsidiary's and the parent's financial statements. And in no case may the difference be more than three months [IAS 27.27]. Consolidated financial statements must be prepared using uniform accounting policies for like transactions and other events in similar circumstances [IAS 27.28]. Minority interests should be presented in the consolidated balance sheet within equity, but separate from the parent's shareholders' equity. Minority interests in the profit or loss of the group should also be separately disclosed [IAS 27.33]. Where losses applicable to the minority exceed the minority interest in the equity of the relevant subsidiary, the excess, and any further losses attributable to the minority, are charged to the group unless the minority has a binding obligation to, and is able to, make good the losses. Where excess losses have been taken up by the group, if the subsidiary in question subsequently reports profits, all such profits are attributed to the group until the minority's share of losses previously absorbed by the group has been recovered [IAS 27.35]. Reference: "IAS 27 Consolidated And Separate Financial Statements (2008)". Iasplus.com. N.p., 2017. Web. 4 June 2017. Consolidation of Financial Statements of a Parent Company and Subsidiary Company Introduction IAS 27 provides guidance on how consolidation of financial statements of the holding company and the subsidiary should be done. Another standard that guides the consolidation of financial statement between the subsidiary and the parent company is SIC 12 which is for special purpose entities. However, IAS 27 is most commonly applied. IAS 27 has two objectives which include the preparation and presentation of consolidated financial statements for a group of entities under the control of a parent; and accounting for investments in subsidiaries, jointly controlled entities, and associates when an entity elects, or is required by local regulations, to present separate (non-consolidated) financial statements ( IAS 27). Identification of Control IAS 27 identify a subsidiary in which the parent company is required to prepare consolidated financial statement using various criteria. Control is presumed when the parent acquires more than half of the voting rights of the entity. Even when more than one half of the voting rights is not acquired, control may be evidenced by power: [IAS 27.13] Over more than one half of the voting rights by virtue of an agreement with other investors, or to govern the financial and operating policies of the entity under a statute or an agreement; or to appoint or remove the majority of the members of the board of directors; or to cast the majority of votes at a meeting of the board of directors. SIC-12 provides other indicators of control (based on risks and rewards) for Special Purpose Entities (SPEs). SPEs should be consolidated where the substance of the relationship indicates that the SPE is controlled by the reporting entity. This may arise even where the activities of the SPE are predetermined or where the majority of voting or equity are not held by the reporting entity. [SIC-12]. Exceptions to Consolidation A parent is required to present consolidated financial statements in which it consolidates its investments in subsidiaries [IAS 27.9] - with the following exceptions. A parent is not required to (but may) present consolidated financial statements if and only if all of the following four conditions are met: [IAS 27.10] 1. the parent is itself a wholly-owned subsidiary, or is a partially-owned subsidiary of another entity and its other owners, including those not otherwise entitled to vote, have been informed about, and do not object to, the parent not presenting consolidated financial statements; 2. the parent's debt or equity instruments are not traded in a public market; 3. the parent did not file, nor is it in the process of filing, its financial statements with a securities commission or other regulatory organization for the purpose of issuing any class of instruments in a public market; and 4. the ultimate or any intermediate parent of the parent produces consolidated financial statements available for public use that comply with International Financial Reporting Standards. Consolidation procedures 1. Intragroup balances, transactions, income, and expenses should be eliminated in full. Intragroup losses may indicate that an impairment loss on the related asset should be recognized [IAS 27.24-25]. 2. The financial statements of the parent and its subsidiaries used in preparing the consolidated financial statements should all be prepared as of the same reporting date, unless it is impracticable to do so [IAS 27.26]. If it is impracticable a particular subsidiary to prepare its financial statements as of the same date as its parent, adjustments must be made for the effects of significant transactions or events that occur between the dates of the subsidiary's and the parent's financial statements. And in no case may the difference be more than three months [IAS 27.27]. 3. Consolidated financial statements must be prepared using uniform accounting policies for like transactions and other events in similar circumstances [IAS 27.28]. 4. Minority interests should be presented in the consolidated balance sheet within equity, but separate from the parent's shareholders' equity. Minority interests in the profit or loss of the group should also be separately disclosed [IAS 27.33]. Where losses applicable to the minority exceed the minority interest in the equity of the relevant subsidiary, the excess, and any further losses attributable to the minority, are charged to the group unless the minority has a binding obligation to, and is able to, make good the losses. Where excess losses have been taken up by the group, if the subsidiary in question subsequently reports profits, all such profits are attributed to the group until the minority's share of losses previously absorbed by the group has been recovered [IAS 27.35]. Reference: "IAS 27 Consolidated And Separate Financial Statements (2008)". Iasplus.com. N.p., 2017. Web. 4 June 2017. **END** ***THANK YOU*** ECONOMIC FACTORS INFLUENCING THE USE OF FUNCTIONAL CURRENCY METHOD Introduction The IFRIC received a request for guidance on whether the underlying economic environment of subsidiaries should be considered in determining, in its separate financial statements, the functional currency of an investment holding company. As a result IAS21 was developed- Determination of functional currency of an investment holding company as well as ASC 830-10-55-5. IAS21 Codification IAS21 Paragraphs 9 - 11 provide factors to be considered in determining the functional currency of an entity. Paragraph 12 states that when the 'indicators are mixed and the functional currency is not obvious, management uses its judgement to determine the functional currency that most faithfully represents the economic effects of the underlying transactions, events and conditions'. In addition, paragraph 17 of IAS 21 requires that an entity determine its functional currency in accordance with paragraphs 9-14 of the standard. Therefore, paragraph 9 should not be considered in isolation when determining the functional currency of an entity. Consequently, how an entity applies IAS 21 for the purpose of determining its functional currency - whether it is an investment holding company or any other type of entity requires the exercise of judgement. IAS 1 Presentation of Financial Statements requires disclosure of significant accounting policies and judgements that are relevant to an understanding of the financial statements. ASC 830-10-55-5 In addition ASC 830-10-55-5 states the following economic factors, and possibly others, should be considered both individually and collectively when determining the functional currency: Cash flow indicators 1. Foreign currency. Cash flows related to the foreign entity's individual assets and liabilities are primarily in the foreign currency and do not directly affect the parent entity's cash flows. 2. Parent's currency. Cash flows related to the foreign entity's individual assets and liabilities directly affect the parent's cash flows currently and are readily available for remittance to the parent entity. Sales price indicators 1. Foreign currency. Sales prices for the foreign entity's products are not primarily responsive on a short-term basis to changes in exchange rates but are determined more by local competition or local government regulation. 2. Parent's currency. Sales prices for the foreign entity's products are primarily responsive on a short-term basis to changes in exchange rates; for example, sales prices are determined more by worldwide competition or by international prices. Sales market indicators 1. Foreign currency. There is an active local sales market for the foreign entity's products, although there also might be significant amounts of exports. 2. Parent's currency. The sales market is mostly in the parent's country or sales contracts are denominated in the parent's currency. Expense indicators 1. Foreign currency. Labour, materials, and other costs for the foreign entity's products or services are primarily local costs, even though there also might be imports from other countries. 2. Parent's currency. Labour, materials, and other costs for the foreign entity's products or services continually are primarily costs for components obtained from the country in which the parent entity is located. Financing indicators 1. Foreign currency. Financing is primarily denominated in foreign currency, and funds generated by the foreign entity's operations are sufficient to service existing and normally expected debt obligations. 2. Parent's currency. Financing is primarily from the parent or other dollar-denominated obligations, or funds generated by the foreign entity's operations are not sufficient to service existing and normally expected debt obligations without the infusion of additional funds from the parent entity. Infusion of additional funds from the parent entity for expansion is not a factor, provided funds generated by the foreign entity's expanded operations are expected to be sufficient to service that additional financing. Intra-entity transactions and arrangements indicators 1. Foreign currency. There is a low volume of intra-entity transactions and there is not an extensive interrelationship between the operations of the foreign entity and the parent entity. However, the foreign entity's operations may rely on the parent's or affiliates' competitive advantages, such as patents and trademarks. 2. Parent's currency. There is a high volume of intra-entity transactions and there is an extensive interrelationship between the operations of the foreign entity and the parent entity. Additionally, the parent's currency generally would be the functional currency if the foreign entity is a device or shell corporation for holding investments, obligations, intangible assets, and so forth, that could readily be carried on the parent's or an affiliate's books. **END** ***THANK YOU***