Asked by Roberta Carubia on Jun 23, 2024
Verified
Why does the multiple consolidation method adopt a revaluation approach to the net assets of sub-subsidiaries?
Multiple Consolidation Method
A technique in accounting that allows for the combination of financial statements from different entities within a group, through methods such as equity or proportional consolidation.
Revaluation Approach
A method of accounting that involves periodic updating of the carrying value of an asset or liability to its current market value.
Net Assets
The total assets of a company minus its total liabilities, representing the owners' equity.
- Grasp the methodologies and principles behind multiple consolidation and the sequential consolidation method.
Verified Answer
- The multiple consolidation approach uses both direct and indirect ownership interests in the NCI allocation.
- Only post-acquisition profits and losses and changes in reserves are allocated to indirect NCI.The measurement is adjusted each year to reflect post-acquisition profits and reserve transfers.
Learning Objectives
- Grasp the methodologies and principles behind multiple consolidation and the sequential consolidation method.
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