Consolidation With Difference Simple Example

Advanced financial accounting. In this presentation we’re going to talk about the consolidation process with a differential we’re going to look at the component parts with a simple example a simple calculation, you’re ready to account with advanced financial accounting, consolidation with differential example. So here’s going to be the basic scenario for many of the practice problems we will be looking with. We have P and S, there’s going to be a parent subsidiary relationship in which we will be making consolidated financial statements. How did this situation take place what constituted this situation, we’re going to say that in this example, P is purchasing the stocks of S. So notice they’re purchasing the stocks of s and therefore negotiating the stock price, which we’re going to say is $1,000 here. Now to simplify this example, you first want to think about this as p purchasing 100% of the stock of s for $1,000. And then once they have control, anything over 51% would then be controlled.