Subsequent date of transaction
The date after the initial obtaining control of the subsidiary by the
parent. It is said that the parent and subsidiary are treated as one entity.
Therefore, the reporting preparation of FS should have all their assets,
liabilities and equity as one. (Consolidated)
The primary concern for subsequent reporting is the net income from
parent and subsidiary. Pero they are treated as one company nga
therefore kailangan mapagsama yun accordingly with proper adjustment
ng NCI, FV of assets, and CI.
Consolidated Net Income (CNI)
The inclusion of net income both parent and subsidiary as one with the
following accounts:
Adj. NI- P xx
Adj. NI - S xx
CNI xx
Consolidated Net Income - Parent (Adj, NI - parent) (CINIP)
It is a net income attributable to the parent:
Any dividends received from subsidiary
NI - P xx by parent is to be removed in working
(Dividends Received from Sub.) (xx) paper since iisang company nga lang sila
and that dividend is an intercompany
FV adjustment based on % (& depreciation) xx +/- transaction
NI - S based on % xx
Gain on BP xx
Goodwill impairment (xx) Either one lang naman ang pede
lumabas dyan
Adj. NI - P
Keep in mind that the goodwill and goodwill impairment measurement is
naka depende kung ano method gamit initially. If Fair value method
(FULL method), the share in goodwill based on % both parent and
subsidiary ***
If Proportionate method (Partial method), the goodwill is only for the
parent as a whole
Non-Controlling Interest, Net income - Subsidiary (NCINIS) (Adj. NI - S)
It is a net income attributable to subsidiary:
NI - S x NCI % xx
FV adjustments based on % xx +/-x
Goodwill impairment (xx) If applicable ***
Adj. NI - S xx
Once na compute na ang consolidated net income for Consolidated
Income Statement, Computing Retained earnings for Consolidated
Balance Sheet is necessary.
Consolidated Retained Earnings
A proper reporting of retained earnings in balance sheet is a must since
it also affect the closing of net income process.
Beg, Retained Earnings (unadjusted) xx
Adj NI - P (CINIP) xx
Dividends paid and declared by Parent (xx)
End, Retained Earnings (adjusted) xx
Non-controlling interest net asset (NCINAS)
It is the adjusted amount of NCI at subsequent reporting period. With
the following adjustment to consider:
Beg, NCI xx The reason bat sinasama yung dividends
NCINIS (Adj. NI - S) xx declared ni subsidiary, is because when you
do a working paper to eliminate
(Dividends declared by subsidiary) (xx) intercompany transaction, nawrite off din
NCINAS xx yung portion ng NCI based on %.
Side note:
1. When allocating goodwill kung kanino attributable between parent
and subsidiary, di nag tutugma by simply using the percentage stated. (if
Fair value method gamit in DOA)
Parent Subsidiary
Fair value transferred (Cons. Trans) Measured NCI
(FVNA based on %) (FVNA based on %)
Goodwill attributable Goodwill attributable
You use prorata on the amount stated above para ma determine yung
goodwill impairment na attributable to parent and subsidiary
2. If the net income was stated na in a middle of the year, it is presumed
na di pa siya closed and kailangan mo pa iconsider yung following:
a) Adding up any inventory valuation since we assume na nabenta
na siya by year end
3. FV adjustments under subsequent - when assets are undervalued,
binabawas siya siya instead of dinadagdagan, since nagrereverse ka ng
dinagdagan mo sa working paper. Eliminating intercompany transaction.
(vice versa sa overvalued)
a) The amortized value to be allocated between partners and
subsidiary is naka depende kung na benta na ba yung asset or
hinde. Example, if inventory was said nabenta in reporting year,
the entire amount magagamit sa pag amortized and allocated
between parent and subsidiary (based on %)
b) Ganun din sa equipment, building, or land. Pero kung di naman
na benta, yung depreciation portion lang (except land since di
naman nadedepreciate land)
https://www.youtube.com/watch?v=41vTUXUwo1w
