Consolidated Financial Statements of International and Bangladeshi Company Essay

An AssignmentOn theAmalgamate Financial Statements of International and Bangladeshi Company


Subject: Submission of an assignment.

Group, Group Accounts and Consolidation

In simple footings a group is created where one company, the parent buys portions in another company, the subordinate, such that the parent company controls the subordinate. A group may include one or many subordinates.

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A concern may run in several different markets with different features. These markets will show different issue for direction to turn to in footings of operations and finance and so on. It would be possible for the different activities to be carried out within a individual limited company. Where separate divisions could be established for each activity. The proprietor would so have one set of histories for the companies, reflecting all its activities.

There are a figure of grounds why the concern might be structured in group:

  1. Accountability of each group of directors can be more precise.
  2. Financing may be made easier.
  3. The assets of the subordinates can be pledged as security for its adoption.

The group history comprises:

  1. Amalgamate balance sheet
  2. Amalgamate income statement
  3. Amalgamate statement of alteration in equity
  4. Amalgamate hard currency flow statement
  5. Notes to the Accounts and comparative figures.

Accounting Principles for Group Accounts

The cardinal issue underlying the group accounts is therefore the demand to reflect the economic substance of the relationship between companies where one has control over another, which together comprise a group.

Producing amalgamate histories that present the group as though it were a individual economic entity reflects this economic substance.

The amalgamate histories besides reflect another cardinal rule that of the differentiation between-

  1. The resources controlled and the consequence they produce
  2. The ownership of this resources and consequence.

The consequence of consolidation

Group accounts consolidate the consequences and net assets of group members to show the group to the parent’s portion holder as a individual economic entity. This reflects the economic substance and contrasts with the legal signifier, where each company is separate legal individual.

Amalgamate Financial Statements of Foreign and Bangladeshi Company

In this subdivision we are traveling to see what the format of the amalgamate fiscal statements is and so compare it to the fiscal statements of the foreign and native companies.

Amalgamate fiscal statements includes-

  1. Amalgamate balance sheet
  2. Amalgamate income statement
  3. Amalgamate statement of alteration in equity
  4. Amalgamate hard currency flow statement
  5. Notes to the Accounts and comparative figures.

Here we are traveling to compare the amalgamate balance sheet, amalgamate income statement, and amalgamate statement of alterations in equity.

The selected companies are –

Foreign company: The Citi Group.

Native company: Orion group.

But because of the inaccessibility of fiscal studies of Orion group Bangladesh we take Summit group as a replacement.

The specifics and the particular entries given in the amalgamate fiscal statements of international and native company is given below: –

Particulars of Amalgamate Balance Sheet

  1. The Citi Group:

Assetss

Cash and due from Bankss

Deposit with Bankss

Federal fund sold and securities borrowed under understanding to resell

Brokerage receivables

Trading history assets

Investings

Loans, cyberspace of unearned income

Allowance for loan losingss

Good will

Intangible assets

Mortgage serving rights

Other assets

Liabilitiess

Non-interest bearing sedimentations in US office

Interest bearing sedimentations in US office

Non-interest bearing sedimentations in offices outside US

Interest bearing sedimentations in offices outside US

Federal financess purchased and securities loaned under understanding to buy back

Brokerage collectible

Trading history liabilities

Short term adoptions

Long term debt

Other liabilities

Stockholder’s Equity

Preferred stock

Common stock

Additional paid in capital

Retained net incomes

Treasury stock

Accumulated other comprehensive income

In the notes to the history they besides disclosed about the sell and purchase of the subordinates and the associates. Like-

  1. Sale of Egg Banking PLC Credit Card Business

On March 1, 2011, the Company announced that Egg Banking plc ( Egg ) , an indirect subordinate which was portion of the Citi Holdings section, entered into a unequivocal understanding to sell its recognition card concern to Barclays PLC. The sale closed on April 28, 2011. This sale is reported as discontinued operations for the full twelvemonth of 2011 merely. Anterior periods were non reclassified due to the immateriality of the impact in those periods. An after-tax addition on sale of $ 126 million was recognized upon shutting. Egg operations had entire assets and entire liabilities of about $ 2.7 billion and $ 39 million, severally, at the clip of sale.

  1. Sale of The Student Loan Corporation

On September 17, 2010, the Company announced that The Student Loan Corporation ( SLC ) , an indirect subordinate that was 80 % owned by Citibank and 20 % owned by public stockholders, and which was portion of the Citi Holdings section, entered into unequivocal understandings that resulted in the divestiture of Citi’s private pupil loan concern and about $ 31 billion of its approximative $ 40 billion in assets to Discover Financial Services ( Discover ) and SLM Corporation ( Sallie Mae ) . The dealing closed on December 31, 2010. As portion of the dealing, Citi provided Sallie Mae with $ 1.1 billion of seller-financing. Additionally, as portion of the minutess, Citibank, N.A. purchased about $ 8.6 billion of assets from SLC prior to the sale of SLC.

  1. Sale of Nikko Cordial

On October 1, 2009 the Company announced the successful completion of the sale of Nikko Cordial Securities to Sumitomo Mitsui Banking Corporation. The dealing had a entire hard currency value to Citi of 776 billion hankerings ( U.S. $ 8.7 billion at an exchange rate of 89.60 hankerings to U.S. $ 1.00 as of September 30, 2009 ) . The hard currency value was composed of the purchase monetary value for the transferred concern of 545 billion hankerings, the purchase monetary value for certain Japanese-listed equity securities held by Nikko Cordial Securities of 30 billion hankerings, and 201 billion hankerings of extra hard currency derived through the refund of outstanding liability to Citi. After sing the impact of foreign exchange hedges of the returns of the dealing, the sale resulted in an immaterial addition in 2009. A sum of approximately 7,800 employees were included in the dealing.

  1. Summit Group Bangladesh

Assetss

Intangible fixed assets

Tangible fixed assets

Investings

Investings in joint ventures

Investing in finance understandings

Debtor

Investings

Cash at bank and in manus

Capital and Militias

Share capital

Capital salvation modesty

Revaluation modesty

Other modesty

Net income and loss history

Minority involvement

In the notes to the history Summit Group intricately showed the investings in different companies and they are given below-

( a ) The Company has an investing of ?329,940 in a company ( Med trade Products Ltd ) bring forthing specialized lesion attention dressings. The keeping consists of 8,130 “B” ordinary portions of 10 pence each, a shareholding of 26.67 % ( 2010: 26.67 % ) . The investing is held at managers ‘ rating, based on the last subscription monetary value for the portion issue in June 2008, and was valued at the year-end at ?2,138,190 ( 2010: ?2,138,190 ) .

( B ) The Company had a retention of 42,921 ordinary portions in ASG Media PLC ( once Avanti Screen media Group PLC ) which was antecedently in disposal. Following a Corporate Voluntary Arrangement, 550 portions in ASG Media were converted into 1 portion in the company which re-listed as Insetco PLC. The company ‘s portions are listed on the Alternative Investment Market but it has no trade, and the investing is held at managers ‘ rating at the yearend of ?nil ( 2010: ?nil ) .

( degree Celsius ) The Company has a retention of 42,921 ordinary portions in Avanti Communications Group PLC. The company ‘s portions are listed on the Alternative Investment Market. The investing is held at managers ‘ rating, based on the relevant quoted mid-market monetary values, and is valued at the year-end at ?194,110 ( 2010: ?182,736 ) .

( vitamin D ) The Company has an investing of ?25,000 in a company ( T-Plan Ltd ) which produces trial direction and planning package. The keeping consists of 18,085 “C” ordinary portions of 0.1 pence each, a shareholding of 2.96 % ( 2010: 2.96 % ) . The investing is held at managers ‘ rating, and was valued at the year-end at ?6,691 ( 2010: ?6,691 ) .

( vitamin E ) The Company has an investing of ?160,000 in Suan Neo Ltd, a company providing take away repasts, following a farther investing in the twelvemonth of ?10,000. The keeping consists of 373 ordinary portions of ?1 each, a shareholding of 28.17 % ( 2010: 26.62 % ) . The investing is held at managers ‘ rating and was valued at the year-end at ?160,000 ( 2010: ?150,000 ) .

( degree Fahrenheit ) The Company has made parts numbering ?321,521 to Seraphim Capital LP, a fund set up to do venture capital investings, following parts during the twelvemonth of ?60,709. The investing is held at managers ‘ rating of ?217,376 ( 2010: ?226,661 ) .

( g ) The Company has an investing of ?100,000 in Voice notes Ltd, a company which transcribes elaborate meeting notes for companies’ gross revenues forces. The keeping consists of 1,360 ordinary portions of ?1 each, and represents a shareholding of 21.8 % ( 2010:21.8 % ) .

The investing is held at managers ‘ rating and was valued at the year-end at ?100,000 ( 2010: ?100,000 ) .

( H ) The Company has an investing of ?101,996 in a portfolio of listed portions following a farther investing in the twelvemonth of ?2,064.

The investing is held at managers ‘ rating, based on the relevant quoted mid-market monetary values, and is valued at the year-end at ?104,314 ( 2010: ?100,407 ) .

( I ) The Company holds, via:

( I ) Medical Equipment Solutions Ltd ( “MESL” ) , an investing in United Open MRI Ltd, a company runing a specializer scanning service.

The managers of MESL hold the investing at managers ‘ rating of ?251,565 ( 2010: ?251,565 ) . The keeping consists of 39,307 ordinary portions, and reflects a shareholding of 12.9 % ( 2010: 12.9 % ) .

( two ) Dale bury ( No. 31 ) Ltd, a retention of 415 ordinary portions of ?1 each and 41,116,604 1p penchant portions in Summit Alpha Ltd. This company makes investings in early phase concerns. The retention of penchant portions in Summit Alpha presently represents 21.88 % ( 2010: 19.65 % ) of the issued penchant portion capital. The figure of penchant portions owned reflects transportations of penchant portions to the Company in portion satisfaction of direction fees owed to it numbering ?42,026. The underlying investings were re-valued at the year-end in conformity with the guidelines issued by the British Venture Capital Association. A release of proviso

of ?3,459 ( 2010: ?1,211 ) has been made in the twelvemonth for the difference between the cost of the investings and the re-valued sum.

Particulars of amalgamate Income Statement

  1. Citi group

Interest gross

Committees and fees

Administration and other fees

Realized additions on gross revenues of investings

Gross damage losingss

Insurance premiums

Other gross

Commissariats of loan losingss

Policyholder benefits and claims

Provision for unfunded loaning committednesss

Compensations and benefits

Premisess and equipments

Technology and communicating

Ads and selling

Restructuring

Other runing

Provision for income revenue enhancements

Income from discontinued operations

Addition on sale

Provision for income revenue enhancements

  1. Summit group

Employee turnover: group and portion of joint venture

Lupus erythematosus: portion of joint venture‘s turnover

Group turnover- Continuing operations

Cost of gross revenues

Operating cost

Other runing income

Share of operating net income in joint venture

Net involvement payable

Tax: group

Tax: joint venture

Minority involvement

These are the specifics shown in the income statements of the selected group companies.

In the notes to the history of acme group Bangladesh they disclosed all the associating affairs in the income statement, harmonizing to the Numberss of the notes to the history given in the fiscal statements. They clearly disclosed how the history considered to be shown on the income statement and what are the accommodations are related to them. They besides disclosed related steps taken in fixing the income statement at every phase of fixing the income statement.

Subordinates

  1. Citi group

The name of the subordinates of the Citi group is given below-

  1. CGMHI
  2. CFI
  3. CCC

In the fiscal study the citi group did non demo the names of their subordinates and associates decently. They merely one time showed their name in the consolidation agenda of the income stetment.

  1. Summit Group

Directly held subordinates & A ; associates of acme group are –

Name

Ownership

Summit insurance service

100 %

Medtrade Merchandises

27 %

Avanti communications

Less than 1 %

Tennyson

90 %

Voicenotes

26.5 %

Summit Asset Management

77.5 %

Tennyson Insurance

38 %

Summit Property

100 %

ASAP

28 %

Prima Public Service

75 %

Decision

Group companies are one of the signifiers of concern organisations. Groups are made to do the concern more expanded with the enlargement of the market and besides with the enlargement of the concern. Day by twenty-four hours the maps of the concern are going more complicated and besides broad spread. In order to do the concern more efficient and profitable group concern is a deceasing demand. After examine the amalgamate fiscal statements of the international every bit good as the amalgamate fiscal statements of the native company we can state that our native companies should unwrap more and more information for the portion holders every bit good as the investors. They should unwrap the sophisticated workings and computations to their fiscal studies to do it clear to the users of the fiscal studies. The native companies should set more accent on unwraping the information in the fiscal studies.