Describe the accounting method used by the parent company to account for its investments in its subsidiaries, such as equity method, cost method, or acquisition method. Explain the rationale for choosing this method and how it affects the parent company’s financial statements.

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Describe the accounting method used by the parent company to account for its investments in its subsidiaries, such as equity method, cost method, or acquisition method. Explain the rationale for choosing this method and how it affects the parent company’s financial statements.
November 30, 2023 Comments Off on Describe the accounting method used by the parent company to account for its investments in its subsidiaries, such as equity method, cost method, or acquisition method. Explain the rationale for choosing this method and how it affects the parent company’s financial statements. Economics, Finance and Investment Assignment-help
Words: 307
Pages: 2
Subject: Economics, Finance and Investment
Topics: Company’s financial statements

Choose a publicly traded parent company that has one or more subsidiaries (notify me via email). You can use any source of information, such as the company’s website, annual reports, SEC filings, etc. Write a report that covers the following aspects: Provide a brief overview of the parent company and its subsidiaries, including their main products, markets, and competitors. Explain the type of business combination that occurred between the parent company and its subsidiaries, such as merger, acquisition, joint venture, etc. Provide the date, price, and method of payment for each business combination. Describe the accounting method used by the parent company to account for its investments in its subsidiaries, such as equity method, cost method, or acquisition method. Explain the rationale for choosing this method and how it affects the parent company’s financial statements. Prepare a consolidated balance sheet and a consolidated income statement for the parent company and its subsidiaries as of the end of the most recent fiscal year. You can use the financial statements of the parent company and its subsidiaries as a starting point, and make any necessary adjustments and eliminations. You can also use any spreadsheet software, such as Excel, to perform the calculations and present the results. Analyze the financial performance and position of the parent company and its subsidiaries based on the consolidated financial statements. You can use any financial ratios, such as profitability, liquidity, solvency, efficiency, etc. Compare the results with the industry averages and the parent company’s competitors. Discuss the advantages and disadvantages of business combinations and consolidated financial statements for the parent company, its subsidiaries, and the users of financial information. Provide examples and evidence to support your arguments.Your report should be between 5 to 10 pages long, excluding any tables, charts, or appendices. You should follow the APA style for formatting, citations, and references. You should use at least five credible sources of information, such as academic journals, books, newspapers, etc.

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