CONSOLIDATED FINANCIAL STATEMENTS

DATE OF ACQUISITION

Total assets of parent XX Total Liabilities of Parent XX

Total assets of subsidiary XX Contingent Consideration (if Asset) XX
Investment in subsidiary (XX) Total Liabilities of Parent (at Fair Value) XX
Fair value adjustments - net XX Consolidated total Liabilities XX
Goodwill – net* XX
Effect of intercompany transactions XX
Consolidated total assets XX

Share capital of parent XX

Share premium of parent XX
Consolidated retained earnings XX
Equity attributable to owners of the parent XX
Non-controlling interests XX
Consolidated total equity XX

SUBSEQUENT TO THE DATE OF ACQUISITION / INTERCOMPANY TRANSACTIONS

Step 1: Analysis of effects of intercompany transaction

Ending inventory of Parent Co. xx Sales by Parent Co. xx

Ending inventory of Subsidiary Co. xx Sales by Subsidiary Co. xx
Less: Unrealized profit in ending inventory xx Less: Intercompany sales xx
Consolidated ending inventory xx Consolidated sales xx

Cost of sales of Parent Co. xx

Cost of sales of Subsidiary Co. xx
Less: Intercompany sales during 2017 xx
Add: Unrealized profit in ending inventory xx
Add: Depreciation of FVA on inventory xx
Consolidated cost of sales xx

Equipment, net – Parent xx

Equipment, net – Subsidiary xx
Unamortized balance of deferred loss* xx
FVA on equipment, net xx
Consolidated equipment – net xx

Step 2: Analysis of net assets

Acquisition Consolidation Net

Subsidiary Co.
date date change
Net assets at carrying amounts
Fair value adjustments at acquisition date
Subsequent depreciation of FVA
Unrealized profit (Upstream)
Unamortized def. loss (Upstream)
Interest income
Subsidiary's net assets at fair value

Step 3: Goodwill computation

Consideration transferred xx
Previously held equity interest in the acquiree xx
Total
Less: Parent's proportionate share in the net assets of subsidiary xx
 Goodwill attributable to owners of parent
Less: Parent’s share in goodwill impairment xx
Goodwill attributable to owners of parent xx

Fair value of NCI (see given)

Less: NCI's proportionate share in the net assets of subsidiary xx
Goodwill attributable to NCI
Less: NCI’s share in goodwill impairment xx
Goodwill attributable to NCI xx

Step 4: Non-controlling interest in net assets

Subsidiary's net assets at fair value xx

Multiply by: NCI percentage xx
Total xx
Add: Goodwill to NCI net of accumulated impairment xx
Non-controlling interest in net assets xx

Step 5: Consolidated retained earnings

Parent's retained earnings – Dec. 31, 2017 xx

Consolidation adjustments:
Parent's share in the net change in Subsidiary's net assets xx
Unrealized profits (Downstream only) xx
Loss on extinguishment of bonds xx
Intercompany interest expense xx
Parent’s share in goodwill impairment (xx)
Net consolidation adjustments xx
Consolidated retained earnings xx

Step 6: Consolidated profit or loss

Parent Subsidiary Consolidated
Profits before adjustments
Consolidation adjustments:
Unrealized profits
Unamortized def. loss
Loss on bonds
Interest exp./income
Dividend income
Net consolidation adjustments
Profits before FVA
Depreciation of FVA
Impairment of goodwill
Consolidated profit

Step 7: Profit or loss attributable to owners of parent and NCI

Owners of
parent NCI Consolidated
Parent's profit before FVA - (Step 6)
Share in Subsidiary’s profit before FVA (c)
Depreciation of FVA - (Step 6)
Impairment of goodwill - (Step 6)
Totals