Fill a form in 3 easy steps - less than 5 mins.
Posted: April 20th, 2022
Explain the entity theory and parent company theories of consolidations.
Identify one drawback of each method.
Suggest to management a strategy to overcome each drawback.
Be sure to provide a rationale for your suggestion.
Respond:
Consolidated financial statement theories
what is entity theory?
Consolidated financial statements created using the entity /contemporary theory approach:
combines in totality the entity created by the parent company and the subsidiary.
give value to various groups including the parent company shareholders, non-controlling shareholders of the subsidiary, and creditors.
net income includes total net income of both parent and subsidiary, whereby, controlling, and non-controlling share of subsidiary net income are distributed thus.
total unrealized gain or loss is eliminated.
One drawback: when the parent can exert total control over the subsidiary, the shares held by non-controlling stockholders is insignificant with regards to equity ownersh
——–
Explain the entity theory of consolidations and the parent company theory of consolidations.
Identify one disadvantage of each method.
Provide management with a strategy for overcoming each disadvantage.
Make sure to explain why you think your suggestion is a good idea.
Respond:
Theories of consolidated financial statements
What exactly is entity theory?
Consolidated financial statements prepared using the entity/contemporary theory method:
combines the entity formed by the parent company and the subsidiary.
give value to various groups such as parent company shareholders, subsidiary non-controlling shareholders, and creditors
net income includes both parent and subsidiary net income, with controlling and non-controlling shares of subsidiary net income distributed accordingly.
The total unrealized gain or loss is removed.
One disadvantage is when the parent has complete control over the subsidiary.
You Want Quality and That’s What We Deliver
Our writing team is assembled through a rigorous selection process, where we handpick accomplished writers with specialized expertise in distinct subject areas and a proven track record in academic writing. Each writer brings a unique blend of knowledge and skills to the table, ensuring that our content is not only informative but also engaging and accessible to a general college student audience
Competitive pricing is a cornerstone of our service, where we balance affordability with exceptional quality. In offering the best writers at rates that rival other writing services, we ensure that students can access top-notch content without breaking the bank unnecessarily. Our fair and transparent pricing structure is designed to provide value for money, making us a go-to choice for students seeking high-quality writing services at an affordable price.
Academic integrity is paramount to our writing service, which is why we produce original research and writing content for every paper. Each piece of work is carefully written from scratch, ensuring that every sentence, paragraph, and page is authentic and free from plagiarism. Our rigorous quality control process involves thorough scanning of every final draft, guaranteeing that the content meets the highest standards of originality and academic integrity. With keen attention to citation and referencing, we ensure that every source is properly credited, giving you complete peace of mind. We also have the best plagiarism checkers like safeassign and turnitin thus providing similarity score for each paper.
When you decide to place an order with Dissertation Help, here is what happens: