Consolidated financial statements based on OAO "Mashtorf"

Размещено на http://www.allbest.ru/

Размещено на http://www.allbest.ru/

THESIS

on the discipline of "Accounting"

on "Consolidated financial statements" based on OAO "Mashtorf"



CONTENTS

INTRODUCTION

1. Theoretical aspects of the concept and of consolidated financial statements

1.1 MAIN COMPONENTS OF THE CONCEPT "consolidated financial statements"

1.2 Principle of consolidated reporting. Legislative and legal support COMPANIES CONSOLIDATED STATEMENTS

1.3 Organization of accounting at the JSC "MASHTORF"

2. ORDER ESTABLISHING THE CONSOLIDATED STATEMENTS OF JSC "MASHTORF"

2.1 PROCEDURE of consolidated financial statements of OJSC "MASHTORF"

2.2 Procedure for consolidation

2.3 METHODS OF CONSOLIDATED STATEMENTS OF PRIMARY

3. DEVELOPMENT OF RECOMMENDATIONS TO IMPROVE THE CONSOLIDATED STATEMENTS

3.1 Automating the process of consolidated financial statements

3.2 Development of methodological recommendations on the formation of the consolidated accounts

3.3 International Financial Reporting Standards and the European Community Directive on consolidated accounts

CONCLUSION

LIST OF USED LITERATURE

APPENDIX A - EXPLANATORY NOTES TO THE ANNUAL REPORT FOR THE YEAR 2009

APPENDIX B - Accounting policy of "MASHTORF"



INTRODUCTION

All organizations of any legal form of ownership must be based on synthetic and analytical accounting accounting financial statements, which is the final stage of the accounting process.

Accounting statements in the prescribed form contains a system of comparable and reliable data on the sales of products, works and services, the cost of production, on the property and the financial position and results of operations.

The consolidated annual financial statements performed by summing up the corresponding row-data included in the forms of the annual financial statements of organizations and enterprises.

In addition, the consolidated accounts are prepared in a single legal entity on the basis of the reported data of its divisions and affiliates, dedicated to a single sheet, but are not separate legal entities and with the subsidiaries and affiliates.

To date, this issue is relevant because:

- Preparation of a summary report is one of the most difficult tasks for the accounting department of the organization;

- Consolidated financial statements is an important indicator of the financial position of the organization, and as such it is of interest to a large number of different users of such information;

- Consolidated financial statements is the information base of financial analysis;

- The consolidated financial statements has a purpose - to show the results of financial and economic activities of a group of related companies, legally independent, but are in fact a single economic organism.

Basic need of the consolidated statement - elimination of selected indicators of enterprises in the group, in order to avoid double counting in the total (consolidated) report group.

Thus, the consolidated accounts are prepared in one of the owner or for statistical generalization, and consolidated - for the owners of the jointly controlled assets.

The aim is to examine the theoretical aspects and study the order of the consolidated financial statements.

The objectives of the work are:

- Consideration of the main components of the concept of the "consolidated financial statements";

- Consideration of the principles of preparing consolidated financial statements and the legislative and legal support of the consolidated financial statements of the enterprise;

- The study of the organization of accounting in the enterprise;

- Consideration of the order of consolidated financial statements of the enterprise;

- Consideration of consolidation procedures;

- Consideration of the methods for primary consolidated accounts;

- Development of recommendations for improving the consolidated financial statements.

The object of study is OJSC "Mashtorf."



1. Theoretical aspects of the concept and of consolidated financial statements

1.1 MAIN COMPONENTS OF THE CONCEPT "consolidated financial statements"

In a market economy any commercial organization seeks to reap economic benefits. It is this goal orientation in the work is essential in business organization, it is recognized as the most important factor in terms of the conditions of formation of the financial resources of any organization, its financial capital.

The main source of useful (clear, transparent, credible, substantial, reliable) information should be the financial statements.

Of consolidated financial statements is primarily associated with large transnational corporations (TNCs), whose shares are listed on stock exchanges and transactions are international. Numerous small and medium-sized companies in most cases exempt from creating it.

However, the value of the consolidated financial statements is beyond the scope of purely informative, as it has very specific users - investors and shareholders. Intercompany transactions may create an unrealistic picture of the activity of a group of companies, its sales, accounts, inventory, financial results.

Consolidated statements present a more objective picture of operations and financial position of a single economic unit without replacing the separate financial statements of the companies, as it reflects its economic relationship. [15]

Reporting can serve as controls for the parent company and affect its dividend policy. In some countries, like the U.S., the consolidated income is the basis for the declaration of dividends (the parent company decides on the payment of dividends for the activities of a subsidiary). Undoubtedly, the consolidated statement contains important information for making financial and operating policy decisions.

If the parent company meets the above criteria, it is required to prepare consolidated accounts. This applies to each of the Group subsidiaries.

Company with subsidiaries that do not prepare consolidated accounts if, in turn, is a subsidiary and its parent company is consolidated.

Consolidated financial statements are prepared on the basis of statements of companies with certain accounting procedures, which are, in essence, the sum of assets, liabilities, income and expenses of the enterprises and the general exclusion of articles.

In content, the consolidated financial statements of the reporting of any other similar independent company, and includes:

- Consolidated Balance Sheet (form № 1);

- Consolidated statement of income (form № 2);

- Consolidated statement of cash flows;

- Explanations (decryption) to the consolidated financial statements;

- Report of the management board of the enterprise group. [11]

Do not always report the group of companies may include all of the positions, the composition of the consolidated financial statements in different countries may be different. So, for example, and Germany, in contrast to the U.S. in the statement does not require the statement of cash flows. May be different and the structure of the consolidated balance sheet or profit and loss account.

According to the 7th EU Directive, which sets out the general rules of the consolidated statement, they should include a balance sheet, income statement and notes (decoding), and supplemented by a special report on the state of concern.

International and Russian rules parent company must consolidate all foreign and national companies of the concern, regardless of the nature of their activities. However, if the activities of an entity is significantly different from the activity of the group, according to local government in the notes to indicate this fact. Also recommended to lead such an enterprise data reporting line item when interpreting certain articles of the consolidated accounts. International standards is also provided (in Russian is not specified), that the company should not be included in the consolidated financial statements, if its share in the share capital acquired exclusively with a view to sale, and if the company ceases to meet the definition of a child, - from this point on is not included in consolidated group.

Exempt from preparing consolidated financial statements, small and medium-sized companies, are complied with two of the three requirements: the size of turnover, total balance and the number of employed. Calculation of total assets and turnover can be gross or net techniques; according to the latest eliminated intercompany transactions.

The consolidated accounts are not prepared, if:

- It is assumed temporary control as a subsidiary acquired in order to sell in the near future;

- A subsidiary operates under severe restrictions, which significantly reduces the possibility of the transfer of funds of the parent company;

- A subsidiary is not significant for the group;

- Put together a few companies do not occupy a significant place in the group;

- The activity of the subsidiary is different from the activities of companies belonging to the group (otherwise violated the concept of fair and accurate assessment);

- High cost and significant delay of information and documents necessary for the consolidation.

In accordance with the concept of accounting and reporting in the medium term, approved by Order of the Ministry of Finance of Russia from July 1, 2004 № 180 consolidated financial statements as a variety of accounting information is intended only as a function and is interested external users. These statements should be one of the main sources of financial information for economic decision-making by these users. [10]

The main task in the area, the consolidated financial statements is to provide interested users with secure access to high-quality, reliable and comparable information on the group of economic entities.



1.2 Principle of consolidated reporting. Legislative and legal support COMPANIES CONSOLIDATED STATEMENTS

In accordance with international standards, the consolidated statements should be based on certain principles and methods (to meet certain requirements).

The principle of completeness. All assets, liabilities, prepaid expenses, deferred revenue of the consolidated group are accepted in full, regardless of department and the parent company. Minority interest is presented in the balance sheet as a separate item under the appropriate heading.

The principle of equity. As the parent company and the subsidiaries are treated as a single economic unit, the equity is determined by the book value of shares in consolidated companies, as well as the financial performance of these companies and reserves.

The principle of fair and accurate assessment. The consolidated accounts should be presented in a clear and easily understandable form and give a true and fair view of assets, liabilities, financial position, profits and losses of the companies belonging to the group and considered as a whole.

Principle of the constancy of consolidation methods and evaluation and the principle of a going concern. Consolidation methods should be used for a long time, provided that the plant is operational, ie does not intend to discontinue its operations in the foreseeable future. Variations are permissible in exceptional cases, and they must be disclosed in the annexes to the report, with justification. This principle applies to both the form and the methods of consolidated financial statements.

Materiality. This principle provides for the disclosure of such items, the value of which can affect the adoption or change the decision on financial and economic activities of the company.

Common methods of assessment. Assets, liabilities, prepaid expenses, income and expenses of consolidated companies should be considered in its entirety.

No matter how they are presented in the current accounting and reporting of companies belonging to the group because the parent does not impose a ban and has no voting credentials approaches. It is important that the consolidation of the assets and liabilities of the parent company and its subsidiaries have been assessed on a uniform methodology applied by the parent company. Assessment methods for legislation, which observes the parent company shall apply to the preparation of the consolidated accounts.

Single date of. The consolidated accounts should be drawn up on the balance sheet date of the parent company. The reporting of subsidiaries should also be recalculated on the date of the consolidated financial statements. [16]

Most of the above principles, on which the consolidated financial statements in accordance with international standards is reflected in the Russian regulatory documents governing the preparation of the consolidated financial statements.

In the consolidated financial statements combine all assets and liabilities, income and expenses of the parent company and its subsidiaries line by line by adding the relevant data by the rules set

Methodological recommendations on the formulation and presentation of consolidated financial statements.

When preparing the consolidated financial statements of the parent entity and its subsidiaries shall be used uniform accounting policies for evaluation of similar items of assets and liabilities, income and expenses, etc.

If the accounting policy of a subsidiary is different from that used for the consolidated financial statements, up to the union of an accounting to the accounting statements of the parent organization, it is in conformity with the accounting policies used for the consolidated financial statements.

In the consolidated financial statements combined financial statements of the parent company and its subsidiaries have been prepared for the same reporting period and on the same date.

Until recently, the preparation of the consolidated financial statements of the Russian Federation Ministry of Finance order regulated in Russia "On the procedure for accounting of individual transactions related to the introduction of the first part of the Civil Code of the Russian Federation" dated July 28, 1995 № 81 and the conduct of the summary (consolidated ) accounting and balance of financial and industrial groups, approved by the Government of the Russian Federation on January 9, 1997 № 24.

Both documents are provided only basic information about the consolidation of reporting.

In addition to these documents Russian Ministry of Finance adopted decree "On Methodological Recommendations on the preparation and presentation of consolidated financial statements" from December 30, 1996 № 112, which repealed the order of July 28, 1995 № 81. In the order of the Ministry of Finance of Russia № 112 flesh out the order number 81, we give a more precise definition of the consolidated financial statements and determine the cases in which it is made.

The introduction of this document - an important stage in the development of the consolidated accounts in Russia. However, the document wrongly equated different in content and concept summary consolidated statements.

The use of these terms as synonyms correctly, since these forms of reporting differ not only by appointment, engineering drafting, group of users, but also conceptually. [12]

Currently, the consolidated annual financial statements are prepared on a unitary enterprises and joint-stock companies (partnerships) of shares (holdings) which is fixed in the federal property (regardless of the size of the share).

International Financial Reporting Standards, describes the preparation of consolidated financial statements (OFC)

As of January 1, 2008, the following standards and interpretations (IFRIC), which determine the order of consolidation:

- IAS 27 "Consolidated Financial Statements and Accounting for Investments in Subsidiaries";

- SIC-12 "Consolidation - Special Purpose Entities";

- SIC-33 "Consolidation and the method of equity accounting - potential voting rights and allocation of dividends to the owners."

As the formation of the group financial statements and the disclosure of information about it is necessary to consider the following international standards and interpretations:

- IAS 28 "Investments in Associates";

- SIC-3, "The elimination of unrealized profits and losses on transactions with associates";

- IFRS 24 "Disclosure of related party";

- IAS (IFRS) 3 "Business Combinations."

Law "On the Consolidated Financial Statements" defines the general requirements for order preparation, submission and publication of the reports.

Under the consolidated financial statements is a system of indicators that reflect the financial position, financial performance and changes in financial position of organizations [22].

It follows that, under the law consolidated financial statements include not only the balance sheet and profit and loss, but also the statement of changes in equity and statement of cash flows. It is mandatory in the reporting including accounting policies and explanatory notes.

In general, the reporting format follows the format of individual accounts. At the same time, in the consolidated financial statements may be additional items in the statement.

1.3 Organization of accounting at the JSC "MASHTORF"

financial statement consolidation

The history of the "Mashtorf" Lievens as all plants, is inseparable from the history of the entire national economy. Due to the fast-growing oil and petroleum industry was necessary to equip them with more sophisticated instruments accounting and control of production processes, the introduction of automation and mechanization of labor-intensive work in these industries.

Today "Mashtorf" is the largest enterprise in the development, design, equipment for oil, power, gas, petrochemical and other industries and the economy.

OJSC "Mashtorf" belongs to the sectors of the economy in which the production of the instruments of control and process control. The main activity - manufacture of instruments and appliances for measuring, monitoring and testing.

OJSC "Mashtorf" provides design, manufacture, supply and maintenance of equipment for the complete tank farms, oil companies, gas stations, process control systems for tank farms, oil production and refineries and chemical plants, equipment monitoring road and rail transport for freight and operations and loading and unloading, motors and pumps in the first half.

Accounting in OAO "Mashtorf» operating accounting service as a separate unit, which is headed by the chief accountant (Figure 1). Accountant of "Mashtorf" uses approved Goskomstat typical standardized form, and self-developed organization.

Accounting in OAO "Mashtorf" is in accordance with the Federal Law of 21.11.1996 № 129 FZ "On Accounting" (as amended on 30.06.03 № 86-FZ), the regulations on accounting and financial reporting in the Russian Federation, approved by Order of the Ministry of Finance of Russia from 09.12.19998, № 60n (as amended on 30/12/99), the applicable accounting regulations, the Plan accounts for financial and economic activity of enterprises, approved by Order of the Russian Finance Ministry of 31.10.2000 , № 94n. (As amended on 07.05.03, № 38N).

In the development of accounting used various forms, which were designed to improve the system of accounting and facilitate the work of an accountant. At present JSC "Mashtorf" applies a simple order form and magazine accounts. At journal-order forms accounting accountant for a certain period of collects documentation (primary, combined), then they are grouped into the storage and grouping statements. Based on the cumulative and generic statements generated logs - order, and then the data is transferred to the general ledger. According to the general ledger are prepared quarterly and annual balance sheets and then reports. Due to its positive qualities, this form of accounting is applied in many enterprises. But it has many negative qualities - it can organically combine analytical and synthetic accounting, and not always followed the principles of relationship and mutual control registers. Figure 2 shows a diagram of journal-order form of accounting "Mashtorf."

Under the financial condition of the company is the ability of the company to finance its activities.

Financial condition is characterized by the availability of funding necessary for the normal operation of the business, the appropriateness of their placement and use efficiency, solvency and financial stability. The purpose of the analysis is not only to establish and assess the financial condition of the company, but also to constantly work towards its improvement.

Figure 3 shows a diagram of the financial activity of JSC "Mashtorf." Financial analysis is a method of assessing retrospective and prospective financial condition of the company. Financial analysis in a market from an ordinary level of economic analysis has become the main method of evaluating the new economy.

Calculate the performance indicators of production and economic activity of JSC "Mashtorf" and are summarized in the table in Appendix A. This analysis was performed using the annual financial statements for 2008 - 2009 years. (Appendix D, E).

Analyze the performance tables of Appendix A.

In the study period revenues and cost of sales and services decreased in 2009 compared with 2008 to 184,431 thousand rubles. (29.47%). The level of cost of sales and services in sales revenue is also reduced, therefore, of "Mashtorf" gets smaller profit from sales. Gross profit decreased by 102,459 thousand rubles. (39.18%) in 2009 compared to 2008

Selling expenses decreased by 3,631 thousand rubles. (23.67%) in the 2009 Administrative expenses also decreased in 2009 to 36 474 rubles. (26.14%) compared to 2008

Operating profit, as mentioned earlier, is reduced in 2009 to 62 354 rubles. (58.47%). This negatively affects the activity of the enterprise.

Other income during the study period decreased by 97 504 thousand rubles. (36.29%), the costs also increase by 99 412 thousand rubles. (36.53%).

Profit before tax in 2009 decreased by 70 695 thousand rubles. (88.44%) compared to the 2008 level of profitability is greatly reduced.

Net profit of the company also fell by 55,737 rubles. (92.55%) in 2009 compared to 2008

From all of these indicators depends on the payroll of "Mashtorf." It decreases in 2009 to 43 966 rubles. (26.89%). Also, the analysis shows that the average number of personnel in 2009 is reduced.

The average monthly wage for 2008 is reduced by 3,916 rubles. (22.29%)

Thus, the enterprise accounting of "Mashtorf» operating accounting, headed by the chief accountant. Accounting Enterprise is an independent unit. At present JSC "Mashtorf" applies journal-order form of accounting. Technical and economic indicators show a decline in activity at JSC "Mashtorf" in the period under study, as a significant decrease in sales profit and all indicators. The main reason for this phenomenon - the decline in production.

So, in a market economy, any commercial organization seeks to reap economic benefits. It is this goal orientation in the work is essential in business organization, it is recognized as the most important factor in terms of the conditions of formation of the financial resources of any organization, its financial capital. The main source of useful (clear, transparent, credible, substantial, reliable) information should be the financial statements. Of consolidated financial statements is primarily associated with large multinational corporations whose shares are traded on the stock exchanges and transactions are international. Numerous small and medium-sized companies in most cases exempt from creating it. In accordance with the concept of accounting and reporting in the medium term, approved by Order of the Ministry of Finance of Russia from July 1, 2004 № 180 consolidated financial statements as a variety of accounting information is intended only as a function and is interested external users. These statements should be one of the main sources of financial information for economic decision-making by these users. The main task in the area, the consolidated financial statements is to provide interested users with secure access to high-quality, reliable and comparable information on the group of economic entities. In accordance with international standards, the consolidated statements should be based on certain principles and methods (to meet certain requirements). OJSC "Mashtorf" is the largest enterprise in the development, design, equipment for oil, power, gas, petrochemical and other industries and the economy. Enterprise accounting of "Mashtorf" accounting is headed by the Chief Accountant. Accounting Enterprise is an independent unit. At present JSC "Mashtorf" applies journal-order form of accounting. Technical and economic indicators show a decline in activity at JSC "Mashtorf" in the period under study, as a significant decrease in sales profit and all indicators. The main reason for this phenomenon - the decline in production.



2. ORDER ESTABLISHING THE CONSOLIDATED STATEMENTS OF JSC "MASHTORF"

2.1 PROCEDURE of consolidated financial statements of OJSC "MASHTORF"

OJSC "Mashtorf" is the consolidated financial statements to the extent and in the manner established by the Accounting Regulations "Accounting Organization" (PBU 4/96), according to the forms developed by the parent organization on the basis of standard forms of accounting. In this case:

- Standard forms of financial statements may be supplemented with the data needed to users of consolidated financial statements;

- Articles (lines) standard accounting forms for which there are no indicators of a group, can not drive, unless the figures were in the previous reporting period;

- The amounts of certain assets, liabilities and business operations should appear in the consolidated financial statements in isolation, without knowing if they can not score for the users of the financial position or results of its operations. [15]

The figures for the individual types of assets, liabilities and business transactions are not provided in the consolidated balance sheet and consolidated income statement, if each of these indicators individually immaterial to assess the financial situation of users, or the results of its activities, as reflected in the total amount of the notes to the consolidated balance sheet and (Water report on financial results.

Leading organization preferred to form a consolidated balance sheet, consolidated income statement and disclosures from one reporting period to another. Changing the selected form of a consolidated balance sheet, consolidated income statement and the Notes to be disclosed in the notes to the consolidated balance sheet and the consolidated report on the financial results, indicating the causes of this change.

The main legal points were the basis for the creation of the integrated structure, which was formed on the basis of structural units (shops, sites, departments) of "Mashtorf" and therefore formed the organizational management structure for each sector of business units, and generalizing the moment is the development of a common management structure of "Mashtorf" (parent).

The structure of "Mashtorf" reflected in Appendix B:

- "Liquid Instruments" produces equipment for tank farms, refineries, oil storage tanks;

- LLC "tool" makes molds, dies, tooling, special. tools, measuring tools, measuring tanks, barriers;

- LLC "Livenka" produces equipment for gas stations;

- LLC "Metallurg" produces castings, spare parts (casting, assembly product), etc.;

- LLC "Electromash" produces electric motors and pumps;

- LLC "Promservice" produces metal, mobile complex tank cleaning, drip. repair and modernization of machine tools, construction of buildings;

- "Measurement Techniques" makes counters, metering units, filters, gas separator.

The reliability of the preparation and observance of the presentation of consolidated financial statements provides a director of the parent organization.

Volume and order, including the timing of accounts of subsidiaries and affiliates of the parent organization (including the additional information necessary for the consolidated financial statements), sets the parent organization.

Prior to the consolidated financial statements to reconcile and resolve all settlements and other financial relationship the parent company and its subsidiaries, and between subsidiaries.

In case the parent company of subsidiaries and associated companies at the same time the consolidated financial statements are prepared by combining the indicators of financial statements of the parent organization and its subsidiaries and the inclusion of data on participation in associates.

Indicators of financial statements of the subsidiary are included in the consolidated financial statements from the first day of the month following the month of purchase of the parent organization of the relevant number of shares in the share capital of the subsidiary or the occurrence of any other possibility to influence the decisions taken by the subsidiary.

Data on associates consist of the consolidated financial statements from the first day of the month following the month of purchase of the parent organization or the corresponding number of shares in the share capital of the company. [12]

Description of each component of the consolidated financial statements must contain the word "consolidated" and the name of the group.

Consolidated financial statements are presented to the founders (participants) of the parent organization. Other interested users of the consolidated financial statements are presented in the cases established by the legislation of the Russian Federation, or by the parent organization.

Appropriate parent organization prepare consolidated financial statements no later than June 30 of the following year, unless otherwise provided by the legislation of the Russian Federation or the constituent documents of the organization.

Consolidated financial statements signed by the manager and the chief accountant (accountant) of the parent organization.

By decision of the members of the group consolidated financial statements may be published in the published financial statements of the parent organization.

Summary (consolidated) statistical reporting PPG prepared and submitted to the State Committee on Statistics of the central company in due course.

Summary (consolidated) reports, accounting and statistical reports reflect the property and financial regulation FPG, and the results of its investment activities.

A common requirement for annual consolidated financial statements of, is the condition that the property and financial position as well as the level of income should be presented in such a way as to look like a group of companies together.

The problem is that the balance of the parent and subsidiary companies can be drawn on different dates and in different currencies, different in structure, composition, content, and assessment items.

During the reporting at the subsidiary may need to make changes:

- The structure of the balance sheet;

- In the content and composition of the balance sheet;

- The assessment of the balance sheet;

- In the conversion of the balance sheet from one currency to another.

The first step in preparation for the consolidated report is rearrangement of the balance sheet.

Need for it usually does not occur when subsidiaries are located in the same country with the parent, because then they tend to use uniform methods of reporting.

However, foreign subsidiaries, accounting records in accordance with national requirements, have to rearrange their balance sheets in accordance with the requirements of the parent company.

Then it is necessary to revise the content of the balance sheet for compliance adopted by the parent company accounting practices.

Pay attention to the valuation of a balance sheet items and to make adjustments if necessary. The changes here may be necessary for foreign subsidiaries, as well as for domestic, if they used different accounting policies from the policy of the parent company.

Final point - the conversion of balance sheet items of foreign operations are consolidated into the currency of the parent company.

2.2 Procedure for consolidation

It would be wrong to think that consolidation - it is a simple summation of articles reporting the parent and its subsidiaries.

Consolidation, in fact, is the substitution statements of the parent company, "the book value of investments" in each subsidiary of the fact that these investments are really at the moment, that is, the share of the parent company in the fair value of the net assets of the subsidiary at the balance sheet date and the remainder arising on acquisition investments. Consolidation should provide an exception again of mutual operations of the companies of the group.

The consolidated data reporting statements of the parent company and its subsidiaries are combined in stages, to present them as a single economic organization. To this end, first summarize the articles itemized statements of the group and then exclude mutual investments and operations. In general, this can be represented as follows:

- Investment costs are eliminated investor equity invested enterprises;

- Remains outstanding under Intercompany transactions, such as intercompany sales, expenses, loans, dividends, are eliminated in full;

- Unrealized gains on transactions among the remnants of goods and fixed assets are eliminated in full;

- Unrealized losses on intra-fund transactions in assets are also eliminated;

- Net profit attributable to outside (minority) shareholders of a subsidiary (minority interest) is reported separately from the profit attributable to the parent company;

- In the consolidated financial statements should also highlight the minority interest in the net assets (or equity).

The consolidated balance sheet is particularly important procedure for consolidation of debt. From a legal point of view, concern (a group of) can not have a loan or debt relative to itself. Therefore, loans and other debt, contributions to the reserve fund and debt between companies belonging to the group, should be excluded. [13]

This applies to the following balance sheet items:

- Outstanding contributions to the share capital;

- Payments for commercial transactions;

- Loans granted to the Group;

- Long-term investments;

- Promissory notes;

- Other debt;

- Short-term financial investments.

Eliminated investments of the parent company in its subsidiaries and the share attributable to the parent company in the equity of subsidiaries.

Equity accounts of the subsidiary to be consolidated:

- The authorized capital;

- Reserve capital;

- Reserves formed from gross income;

- Retained earnings (loss);

- Net income (loss) of the current year.

There are stages of consolidation of the balance, depending on the presence or absence of mutual transactions:

- Initial consolidation (in the preparation of the consolidated financial statements for the first time the formerly independent companies) related to the acquisition of the invested enterprise;

- Subsequent consolidation (in the consolidated statements of the group formed earlier and ongoing mutual transactions).

Techniques and methods of consolidated financial statements in different countries are different.

Consolidated profit and loss account. The profit and loss account of the subsidiary is 100% owned by the parent company, there can be no changes included in the profit and loss account of the parent company for the consolidated figures. In practice, there are adjustments to compensate figures for revenues, costs, profits, dividends, etc. between companies (Annex B).

Here is an extract from Annex B.

Thus, the consolidation of a substitution in the statements of the parent company's "book value of investments" in each subsidiary of the fact that these investments are really at the moment, that is, the share of the parent company in the fair value of the net assets of the subsidiary at the balance sheet date and balance arising on acquisition investments.

2.3 METHODS OF CONSOLIDATED STATEMENTS OF PRIMARY

Depending on the nature of the transaction for the investment and establishment of control are two of the primary method by which the consolidated financial statements: the method of purchase (acquisition) and the method of merger (absorption). These methods differ procedurally and have a great impact on the aggregate financial results presented in the consolidated financial statements.

The purchase method. According to this method at the date of acquisition to determine the fair market value of the parent company acquired identifiable assets and liabilities. Amount of such assets is recognized under the parent company "Investments".

It should be borne in mind that the assets are bought not actually invested companies and its share in equity, equivalent to net assets at cost. Purchase of assets, such as property, land, etc. radically different from the purchase of shares or in the share capital by the same amount. Purchase of assets does not entail the need to draw up consolidated accounts and the acquisition of more than 50% of the voting rights would require consolidation.

The purchase and establishment of control is difficult to determine the date on which should be consolidated because the date of acquisition of shares in the capital and the date of the revaluation of assets may be different.

Profit of the acquiree obtained prior to the date of purchase, not included in the consolidated financial statements.

The difference between the price paid for the acquired net assets of a going concern, and the fair market value is the price the firm or reserve capital (negative goodwill arising on the purchase price, less the fair market value). [18]

Thus, the price of the company reflects the potential profitability of the subsidiary, not shown in the account, and the value of unidentified assets and qualitative indicators. Price firm recognized in the consolidated balance sheet under "Intangible Assets", which is subject to depreciation over the period of its expected future profitability.

If the acquiring company already has a reputation, relationships, well-established and profitable production, the best-selling products, and well-organized distribution system, the cost of acquisition will be different not only from the book value of net assets, but also on the fair market value of the identifiable assets.

The fair market value in different situations may be different. In some cases - is the value of assets and liabilities for transactions of informed and interested parties not participating in a particular transaction for the acquisition. In the other - the lowest replacement cost is applied when the assets actually be filled. This may be a net cost of implementation, if the assets are to be sold.

It should be noted that the fair market value is determined differentially by type of property. This may be used in reference prices for machinery and equipment, the prices of relevant markets, the present value of long-term receivables and payables, current cost of reproduction of land and work in progress, the adjusted acquisition cost of inventory and long-term contracts.

Thus, the price of the company - is the difference between the amount paid to a going concern, and the fair market value of the acquired identifiable assets.

The need for consolidation of capital associated with the elimination of double counting in the consolidated accounts and the correct reflection of the equity in the balance of a single economic unit.

The consolidated accounts are prepared in terms of the parent (holding, Office).

For the purpose of consolidated financial statements in accounting Western guided quantitative approach to measuring the impact of these operations on the investor that is largely arbitrary, since the dependence of the project company will not necessarily result in a high proportion of the investor in its share capital, and the control can be carried out in another way .

There are three levels of influence of the investor:

- Less than 20% in the share capital of the investee company (no significant effect);

- 20 to 50% (significant influence);

- More than 50% in the share capital of the investee company (control of consolidated financial statements). [21]

Acquisition of more than 20% of shares with voting rights, can exercise significant influence over the investee. To account for these shares using equity method.

In this case, the participation in the share capital of the investee company in excess of 20%, suggests that the investor shall include in its report to the appropriate share of the profits or losses of a controlled entity, such investments are not only easy to obtain dividends. Such companies are called sister or associate, the Civil Code of the Russian Federation - dependent.

There are three main features of the method:

- The investor takes into account the acquired shares at cost;

- Part of the net earnings of the investee company's investor records an increase, and losses - in the reduction of investments;

- Dividends received by investors include the increase in cash and reduced investment. [10]

Thus, the present value of the investment on the balance sheet consists of the following elements: the cost of the + appropriate share of profits - an appropriate share of losses - receive / dividends received.

As noted above, the establishment of control is called the parent company of the investor and investee company - a subsidiary. In this case we need to draw up consolidated accounts.

On the one hand, each of these companies is a separate legal entity and of its financial statements, on the other hand, because of the special relationship and communication between the subsidiary and the parent company, they are treated as a single unit and prepare the general statements, called consolidated.

Pooling (absorption). Previously described method of acquisition by purchase has its own problems: first of all in this method need for costly re-evaluation, but also requires the investor has available cash resources. The alternative he advocates are increasingly used pooling investor invested company, pursuant to which requires a small amount of cash and shares are exchanged for shares of the investor investee. It avoids the payment of taxes, and the shareholders are not deprived of property rights, because in return get a new old stock (although often this exchange ratio is clearly not beneficial to the former owners). At the confluence of the right may be acquired not only the parent company, but the company is not part of the group, or distributed among several companies.

The characteristic features of the method of merger (absorption):

- Assets and liabilities are not carried and are not adjusted;

- Investments are shown at face value;

- Income received by a subsidiary before the merger are included in the consolidated financial statements.

Application of this method is permitted in the following cases:

- The parent company trades more than 90% of the nominal capital of the subsidiary;

- Exchange of shares of the parent company for the shares of the subsidiary;

- Payments in cash should not exceed 10% of the nominal value of the issued shares;

- The company must be the same area.

With this method, there is no firm price, no revaluation of assets to their fair market value, which would lead to an increase in depreciation charges. [16]

The consolidated statement of income. Consolidated profit and loss account prepared similarly consolidated balance sheet, ie summing the profit and loss accounts of the reporting companies in the group, and the exclusion of income and expenses arising from intra-group transactions, because the concern can not realize gains and losses on transactions within itself. In its consolidated statement of income includes only the financial results of transactions with third parties not part of the group. This is achieved by conversion of corresponding costs and benefits, and (or) their rearrangement in the profit and loss account. It should be noted that not only excludes revenue from sales of products and other income from sales and services. (Appendix B)

The process of consolidation of the profit and loss include:

- Consolidation of the internal turnover from the sale between the Group companies,

- Consolidation of other income and expenses,

- Consolidation of translation gains or losses within the group.

The consolidated statement of income may be a situation where enterprises groups use different methods of cost accounting - full cost method or the method of direct costs. Therefore, during the preparation of the consolidated financial statements to account for all profit and loss statements of the individual companies on one of these two methods.

Since it is always associated with significant costs, all enterprises should concern from the beginning to stick to one method of accounting for the costs of the consolidated statement of income.

Above was the technique of so-called full consolidation used for subsidiaries. As already mentioned, the inclusion of the results of jointly controlled entities and joint activities in the consolidated group is similar to the full consolidation of the use of the method of proportional consolidation or consolidation of quotas based on the proportional inclusion in the report group's share of the parent company's assets and liabilities as well as the costs and benefits the joint venture or joint venture.

On consolidation, reporting companies in the group, in a subsequent period of their activity additional difficulties related to the necessity of elimination of items that are mutual in-house operations, in order to avoid double counting and artificially inflating the value of capital and financial results. Articles to be elimination - is items that are excluded from the consolidated financial statements as a result of double counting and distortion of the financial performance of the group.

The concept of the group assumes a special interest in the transaction between the companies within the group. Intercompany transactions are similar to transactions between branches (departments) within the company. These operations are done in business transactions and settlement, loans, dividends received. All such transactions must be eliminated in preparing the consolidated balance sheet and income statement. Should be eliminated and intercompany balances. [12]

When preparing the consolidated financial statements should be eliminated loans, accounts receivable, accounts payable and accruals, as a single economic unit can not have accounts receivable or accounts payable to herself.

Subject to elimination following calculations:

- Debt is not made to the authorized capital contributions;

- Advances received or issued;

- Loans to companies in the group;

- Reciprocal receivables and payables Group;

- Other assets and securities;

- Expenses and deferred income;

- Charging;

- Contingency operations.

If the accounts receivable of a fully correspond to the amounts payable other company in the group, they are simply omitted.

The reasons for discrepancies in accounts receivable and accounts payable in accounting for the parent company and the subsidiary may be due to methodological differences, incorrect, time differences and other reasons. Such differences can easily be resolved without any impact on the profit and loss account. Accounts payable may exceed accounts receivable due to the different methods used estimates (reserve account of one company in the absence of accounts receivable to another company of the group).



3. DEVELOPMENT OF RECOMMENDATIONS TO IMPROVE THE CONSOLIDATED STATEMENTS

3.1 Automating the process of consolidated financial statements

Formation of the consolidated financial statements is a fairly time-consuming process. Therefore, with appropriate use of information systems.

Typically, companies in the group are used in the various accounts of its activities and management systems. It therefore seems more appropriate not to translate them into a single system, and used to collect information from the field, processing and compilation of summary (consolidated) statements in the whole group of special software and methodological solutions.

For these purposes, you can use the system "1C: Consolidation of 8", which provides for the collection, processing and presentation in a common format of financial information of all subsidiaries and affiliated companies, allowing to apply the necessary methodology and understand the requirements of international standards.

In this reconciliation intercompany sales, their elimination, performance adjusting entries, and other operations are carried out automatically. In addition, domestic enterprises keep records and prepare reports in accordance with RAS.

Methodology embedded in the software solution enables consolidated accounts for the group of companies form the RAS and also according to the Order № 112 (Figure 4). However, you can not only take into account the demands on MTSFO, but will continue to transform the summary consolidated statements.

Algorithm of consolidated accounting standards

Algorithm of consolidation can be described by the following steps:

- To obtain from the subsidiary companies (SDCs) regulatory reporting and special forms that reveal intercompany sales (VGO) of subsidiaries;

- To verify the consistency of the input information regarding past performance and cross-checks incoming reports (for example, compliance with the balance of the profit and loss account). Implement reconciliation reports intragroup transactions;

- To make adjustments. Deducted from the performance reporting enterprise data that arose from intercompany transactions and which should be excluded from the consolidated financial statements (if there are cases related to associated companies, joint activity or the presence of minority shareholders, are also required special adjustments;

- To calculate the unrealized profit attributable to the balance of assets;

- Reporting, cleansed of VGO summarize line and get consolidated;

- Validate the resulting consolidated financial statements.

Information on subsidiaries and affiliates

During the consolidation of a lot of attention is paid to the records of the VGO provided by subsidiaries. Among them: