Group Accounting & Consolidation Course

Lesson 1 • Overview of Consolidation Methods

Introduces full consolidation, equity method, and proportionate consolidation at a conceptual level. Sets the stage for detailed method coverage in later chapters.

Lesson 2 • Group Structures and Relationships

Defines parent, subsidiary, associate, and joint venture relationships. Establishes the vocabulary and structural logic underpinning all consolidation work.

Lesson 3 • Purpose of Consolidated Statements

Explains why consolidated statements present a group as a single economic entity. Connects user needs to the design of group reporting.

Lesson 1 • Contingent Consideration and Acquisition Costs

Addresses the recognition and subsequent measurement of contingent consideration and the expensing of transaction costs. Impacts post-acquisition profit and loss.

Lesson 2 • Fair Value Measurement at Acquisition

Applies fair value principles to acquired assets, liabilities, and contingent liabilities. Accurate fair value allocation is essential for correct goodwill calculation.

Lesson 3 • Applying the Acquisition Method

Covers the four steps of the acquisition method: identifying the acquirer, determining the acquisition date, recognizing assets and liabilities, and measuring consideration.

Lesson 4 • Identifying a Business Combination

Distinguishes a business combination from an asset acquisition using the definition of a business. Correct identification determines which accounting rules apply.

Lesson 1 • Eliminating the Investment in Subsidiary

Cancels the parent's investment against the subsidiary's equity at acquisition. This elimination is the core mechanical step in consolidation.

Lesson 2 • Intragroup Balances and Transactions

Eliminates intragroup receivables, payables, loans, and unrealized profits on inventory and assets. Failure to eliminate distorts group assets and profits.

Lesson 3 • Non-Controlling Interests on the Balance Sheet

Calculates and presents non-controlling interests within consolidated equity. Distinguishes NCI measurement under full and partial goodwill methods.

Lesson 4 • Fair Value Adjustments Post-Acquisition

Applies depreciation and amortization to fair value uplifts recognized at acquisition. Adjustments affect both consolidated assets and post-acquisition profits.

Lesson 1 • Combining Income and Expenses

Aggregates parent and subsidiary income and expenses line by line, adjusted for intragroup sales. Establishes the starting point for the consolidated income statement.

Lesson 2 • Intragroup Dividends and Loans

Eliminates dividends received from subsidiaries and intragroup interest income and expense. Prevents double-counting of income within the group.

Lesson 3 • Consolidated Statement of Changes in Equity

Tracks movements in parent equity and NCI equity across the reporting period. Reconciles opening and closing consolidated equity balances.

Lesson 1 • Goodwill Within Equity-Accounted Investments

Identifies and retains goodwill embedded in the cost of an associate or joint venture. Goodwill is not separately tested but is part of the overall impairment assessment.

Lesson 2 • Equity Method Mechanics

Calculates the initial cost of investment and subsequent adjustments for the investor's share of profit, loss, and dividends. Produces the equity-accounted carrying amount.

Lesson 3 • Intragroup Transactions with Associates

Eliminates unrealized profits on upstream and downstream transactions with associates to the extent of the investor's interest. Differs from full elimination used for subsidiaries.

Lesson 4 • Identifying Associates and Joint Ventures

Applies significant influence and joint control tests to classify investments correctly. Misclassification leads to the wrong accounting method being applied.

Lesson 1 • Recognizing and Measuring Impairment Losses

Compares carrying amount of a CGU to its recoverable amount and records any shortfall. Impairment losses reduce goodwill first, then other assets pro rata.

Lesson 2 • Cash-Generating Units and Goodwill Allocation

Defines cash-generating units and explains how goodwill is allocated to them at acquisition. Proper allocation is the prerequisite for a valid impairment test.

Lesson 3 • Recoverable Amount Determination

Calculates recoverable amount as the higher of fair value less costs of disposal and value in use. Both approaches require significant judgment and estimation.

Lesson 1 • Loss of Control and Deconsolidation

Deconsolidates a subsidiary when control is lost and recognizes a gain or loss in profit or loss. Any retained interest is remeasured to fair value on the date control is lost.

Lesson 2 • Step Acquisitions to Obtain Control

Remeasures previously held interests to fair value when control is obtained. The remeasurement gain or loss is recognized in profit or loss at the acquisition date.

Lesson 3 • Reduction to Associate or Financial Asset

Applies equity method or financial instrument rules to interests retained after loss of control. The transition requires reclassification of cumulative other comprehensive income.

Lesson 4 • Partial Disposals Retaining Control

Records sales of subsidiary shares that do not result in loss of control as equity transactions. Proceeds are allocated between NCI increase and parent equity.

Lesson 1 • Consolidating Sub-Subsidiaries

Extends consolidation to multi-level group structures where a subsidiary itself has subsidiaries. Effective ownership percentages determine NCI calculations at each level.

Lesson 2 • Group Disclosures and Segment Reporting

Prepares required disclosures for subsidiaries, associates, joint ventures, and operating segments. Disclosures enable users to assess the risks and returns of group components.

Lesson 3 • Consolidated Statement of Cash Flows

Constructs the group cash flow statement by eliminating intragroup cash flows and adjusting for acquisition and disposal cash effects. Presents net cash from operating, investing, and financing activities.

Lesson 4 • Hyperinflationary Economies in Groups

Restates financial statements of subsidiaries in hyperinflationary economies before translation. Restatement uses a general price index to maintain purchasing power comparability.