Accounting Assignment Help
Consolidation of financial statements takes place when one enterprise controls the other enterprise as per the definition of control. Consolidated financial statements are prepared by the parent company and it generally includes consolidated balance sheet, consolidated statement of profit and loss, and notes forming part of the accounts. Consolidated financial statements are presented in the same format as used by the parent company for its separate financial statements.
Post merger / Acquisition Financial Account Book Keeping
Merger and acquisitions deal with buying, selling, dividing and combining different companies that can help them grow rapidly in their sector of their origin or any other sector. Merger is a creation of a one new entity from two different companies, whereas acquisition is acquisition of one entity by the other entity. Entities are required to maintain proper books in order to record the merger/acquisition transactions. Different methods of accounting are also prescribed to record the merger/acquisition transactions.
Acquisition Accounting / Acquisition Analysis
Acquisition accounting is the procedure to be adopted by the acquiring and acquired firm for preparing the consolidated financial statements. The purchase price of the acquired firm is bifurcated between tangible and intangible assets based on fair market value. Any difference between the two is allocated to goodwill. It is also known as “business combination accounting”.
Goodwill Determination and Accounting
Goodwill can be defined as reputation, brand and commercial secrets of the enterprise. Goodwill is an intangible asset which can also be defined as the difference between the purchase price and the net assets of the acquired enterprise. Goodwill calculation is mainly conducted when amalgamation or acquisition take place. Goodwill is important in a business as it is a reputation created by the organisation in the industry as well as among the customers.
Preparation of pre and post merger financial statements
Enterprises in merger analyse the financial position of both the entities before and after merger. Financial statements are prepared pre and post merger to evaluate the performance of the entities and to find out any synergy benefit gained by the merged entity. The pre and post merger financial statements are prepared in order to record the merger transactions as well as any benefit achieved by the merged enterprise.
Accounting standards are the guidelines, procedures and set of standards which are to be followed by the enterprises while preparing the financial statements. Accounting standards are applicable to governmental as well as non-governmental enterprises. Accounting standards are the general guidelines which every enterprise needs to follow in order to ensure transparency and comparison among different enterprises. It is helpful for comparison of the financial performance of different enterprises as the basis of preparation of financial statements is same.
International Financial Reporting Standards are the basis and common standards for preparation of financial statements so that financial statements are understandable and comparable internationally. They are international accounting standards. IFRS are important as they efficient formulation of national accounting standards and facilitates comparison among companies. IFRS are useful for companies that have dealings in many overseas countries.
Australian Accounting Standards
Australian accounting standards the accounting standards of Australia which the Australian entities are required to follow. Australian Accounting Standards are developed and maintained by the Australian Accounting Standard Board. It is applicable to public as well as private enterprises. Same as AS and IFRS, AAS are also followed for the purpose of maintaining comparability and understandability of the financial statements of different enterprises.