Accounting consolidating Virtual seks chat
Upon consolidation, the original organizations cease to exist and are supplanted by a new entity.
A parent company can acquire another company by purchasing its net assets or by purchasing a majority share of its common stock.
These documents are called consolidated financial statements and allow the health of the group to be assessed as a whole, rather than piece-by-piece.
Regardless of the method of acquisition; direct costs, costs of issuing securities and indirect costs are treated as follows: Treatment to the acquiring company: When purchasing the net assets the acquiring company records in its books the receipt of the net assets and the disbursement of cash, the creation of a liability or the issuance of stock as a form of payment for the transfer.
Treatment to the acquired company: The acquired company records in its books the elimination of its net assets and the receipt of cash, receivables or investment in the acquiring company (if what was received from the transfer included common stock from the purchasing company).
After their acquisitions, these smaller companies, or subsidiaries, may have remained legally separate from the large corporation, or parent company.
However, when reporting financial information, the parent company is required to submit financial statements that combine their information with that of their subsidiaries.
There may be amalgamations, either by transfer of two or more undertakings to a new company, or to the transfer of one or more companies to an existing company".