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Started By
Message
lets talk journal entries for consolidations
Posted on 9/17/12 at 1:01 am
Posted on 9/17/12 at 1:01 am
oh hey guys, so i'm kickin it in grad school having a little late night fun with the equity method for 100% owned subsidiaries.
so, whats the journal entry if the subsidiary owes the parent a receivable?
so, whats the journal entry if the subsidiary owes the parent a receivable?
3
Posted on 9/17/12 at 8:57 am to joejohnson90
They eliminate 100%. On the parent: Cr receivable from sub, Debit IC payable on the books of the sub. In real life, we book it as a "reversing entry" so that as soon as we open the ledger for the next period, the entry reverses out and puts the amounts back in the accounts.
Also, the entry can be a little more complicated depending on how the system books intercompany transactions.
Also, the entry can be a little more complicated depending on how the system books intercompany transactions.
Posted on 9/17/12 at 9:01 am to joejohnson90
You use acquisition method for external reporting for 100% owned subs. I assume you are talking about the elimination entry?
Debit A/P Credit A/R will eliminate a intercompany receivable/payable.
Debit A/P Credit A/R will eliminate a intercompany receivable/payable.
Posted on 9/17/12 at 10:02 am to Crbello4Hiceman
quote:
They eliminate 100%. On the parent: Cr receivable from sub, Debit IC payable on the books of the sub. In real life, we book it as a "reversing entry" so that as soon as we open the ledger for the next period, the entry reverses out and puts the amounts back in the accounts.
Also, the entry can be a little more complicated depending on how the system books intercompany transactions.
This.... Just make sure everything washes out... A receivable to the parent company from the sub is a payable for the sub to the parent.
Posted on 9/17/12 at 10:51 am to Corn Dawg Nation
quote:
Just make sure everything washes out
yep....in the consolidated financials there is no A/P or A/R reported as the consolidated entity has no technical liability or asset since the payable & receivable fall under one big reporting umbrella.
Posted on 9/17/12 at 10:56 am to joejohnson90
quote:
equity method for 100% owned subsidiaries
Does not compute
Posted on 9/18/12 at 9:37 am to igoringa
Leave the dude alone. I asked questions in much worse ways when I was at LSU.
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