Combined Financial Statements/push Down Accounting

Front 1

What is meant by "Combined FSs" or "Push down Accounting"?

Back 1

They are combined FSs of a group of related companies (owned by one person) (not consolidated because there is NO parent company).

Front 2

What are the types of combined FSs?

Back 2

1- Companies are under common control (e.g. , individual owns many companies)
2- Companies are under common management
3- Unconsolidated subsidiaries (e.g. , many foreign subs) are combined

Front 3

Note

Back 3

Intercompany transactions & balances among these combined FSs' companies should be eliminated.

Front 4

Note

Back 4

NCIs, etc. , in combined FSs should be treated like consolidated FSs.

Front 5

Note

Back 5

Capital stock & REs in combined FSs should be added across, not eliminated.

Front 6

Note

Back 6

I/Ss in combined FSs should be added across.

Front 7

Note

Back 7

Push down accounting reports assets & liabilities at FV in separate FSs of the subsidiary.

Front 8

Note

Back 8

Under Push down Accounting, consolidation adjustments are pushed down into the records (& separate FSs) of each subsidiary.

Front 9

What are those consolidation adjustments that are required under Push down Accounting?

Back 9

1- Assets & liabilities are adjusted
2- REs of the subsidiary are transferred to APIC (to the extent of parent company's percentage of ownership).
3- NI of each subsidiary includes depreciation, amortization, & interest expense based on FVs rather than historical cost.
4- The SEC requires push down accounting for each substantially wholly-owned subsidiary.