SPECIFICS OF CONSOLIDATION FROM THE POINT OF VIEW OF THE STATUTORY AUDITOR IN THE EVENT OF LOSS OF CONTROL

LENKA UŽÍKOVÁ

https://doi.org/10.53465/EDAMBA.2021.9788022549301.530-540

 

Abstract: The loss of control of a parent company over the subsidiary is a very specific area of consolidation, which, however, must also be addressed by the statutory auditor. This is called deconsolidation. The aim of this paper is to analyze the process of deconsolidation and reflect it on two practical examples. We will first analyze the specifics of deconsolidation from the point of view of the statutory auditor and then reflect them on practical examples, dealing with two cases - the sale of a subsidiary, which at the time of sale has higher equity than at the time of acquisition and at the time of sale lower equity than at the time of acquisition of the share. We will show how to proceed in these cases, as we will be working with the data on the subsidiary as of the date when the parent company will no longer have control over the subsidiary. Based on the solution of examples, which will be reflected numerically and in tables that will show the individual data in the individual and consolidated financial statements, we will see how deconsolidation will affect the consolidated financial statements in individual cases.

Keywords: loss of control, consolidated financial statements, deconsolidation

JEL classification: M41, M42

Fulltext: PDF

Online publication date: 12 May 2022

 

To cite this article (APA style): 

Užíková, L. (2022). Specifics of Consolidation from the Point of View of the Statutory Auditor in the Event of Loss of Control. Proceedings from the EDAMBA 2021 conference, 530 – 540. https://doi.org/10.53465/EDAMBA.2021.9788022549301.530-540