If you translate the financial statements to a presentation currency for the purpose of consolidation, you need to be careful with certain items.
Let’s be more practical today and learn some advanced accounting techniques.
Also, this is a matter of fact and should be based on the currency where the majority of the cash is received and expended. Here the company chose pounds as the functional currency because it is the local currency.
Organizing Your Information Setting Up a Worksheet Combining Financial Statements Eliminating Duplicate Values Community Q&A Many large companies are partially or entirely made up of smaller companies that they've acquired throughout the years.
After their acquisitions, these smaller companies, or subsidiaries, may have remained legally separate from the large corporation, or parent company.
Here’s the question: Mommy Corp has owned 80% shares of Baby Ltd since Baby’s incorporation.
Below there are statements of financial positions of both Mommy and Baby at 31 December 20X4.