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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