Corporate AccountingMandora Cement Pty Ltd owns 90% of Wagait Sand Supplies Pty Ltd and the...

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Corporate AccountingMandora Cement Pty Ltd owns 90% of Wagait Sand Supplies Pty Ltd and the accountant William Cox is having difficulty understanding the adjustments that are required for the non-controlling interest. He is particularly confused over the need to adjust for intragroup transfers and cannot understand the treatment when it comes to plant and machinery, inventory and a charge from Mandora Cement for management services. 					Required:Write a business report to William Cox setting out the reason for the adjustments, explaining the treatment of the different transfers and any difference between them. 					(14 marks)  					The report should take the format of a formal business report, written by your firm with yourself as lead author. Marks will be awarded for presentation style and an appropriate business format.  					(16 marks)

Harshit · Accepted Answer

Answer to Question 3
EXECUTIVE SUMMARY
Consolidated Financial Statement is required to be prepared by the parent or holding company which controls one pr more entities. Control over an entity of another entity is based on the ownership of one company by another or power to control the board of another company or control over the management of a company. In case of consolidation of financial statements, line by line, the similar items are added and the common balances between the companies are cancelled off. In the statement of profit and loss of the consolidated company, the profit attributable to the parent company and the non-controlling interest has to be disclosed and the equity held by minority interest along with holding of parent company has to be disclosed. The accounting policies which are followed by the subsidiary company has to be disclosed in the consolidated financial statements. 
INTRODUCTION
For any business to grow, it has to conduct its activities in an integrated manner and the assets are to be utilized to conduct the operations at a comparatively lower cost and generate higher returns for the stakeholders directly and growth of any business is the primary objective of any organization which can either be organic or inorganic. For this purpose, the companies generally merge, demerge, acquire, and dispose off, etc, another company for meeting this requirement or growth.  A combination of business is a transaction in which one business acquires control over another business. The company acquiring another company may or may not lose its separate entity based to the type of agreement as made between the companies. The separate legal entity defines the between the companies and the existence of the acquire company. The acquired company is known as subsidiary company if when the total control and the operation of the acquired company are transferred to the acquiring company and the acquiring company is known as the parent company.

Corporate Accounting Mandora Cement Pty Ltd owns 90% of Wagait Sand Supplies Pty Ltd and the accountant William Cox is having difficulty understanding the adjustments that are required for the...

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