Introduction to Group Account


A group of companies exists where there is a parent company and one or more subsidiary companies. Thus, a group is a parent and one or more subsidiaries.
Parent
A parent is an entity that controls one or more entities in a group. If the only assets of the parent in a subsidiary company are shares, the parent company is called a holding company.

Subsidiary company
A subsidiary company or subsidiary for short, is an entity, that is controlled by another entity.

Control
Control is the power to govern or influence the financial and operating policies of an entity to obtain benefits from the entity that is controlled.
Control exists when the parent company has over 50% of the equity or voting power of the subsidiary.

Consolidated Financial Statements

Goodwill on Consolidation
Goodwill arises on consolidation when the price paid to acquire the subsidiary is greater than the fair value of the identifiable net assets acquired


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