Workpapers, eliminations, and a reviewable close.
An ASC 810 operational workflow for controllers and fractional CFOs after a qualified professional has reached the control conclusion.
The consolidation work starts after the control conclusion.
Once a qualified professional determines that consolidation applies, the execution work needs a documented path. This lesson covers preparing the source balances, reconciling intercompany activity, documenting eliminations, presenting noncontrolling interests, and preserving the reviewer trail.
Reconcile the separate-entity records
Resolve balance and transaction differences before relying on a consolidated reporting output.
Document intercompany eliminations
Maintain support for intercompany receivables, payables, sales, purchases, loans, interest, investments, and other eliminations relevant to the facts.
Keep NCI and review support visible
Retain the workpapers and evidence that support presentation and the qualified reviewer’s conclusion.
This course is educational content, not accounting or audit advice. The applicable guidance, facts, and qualified professional judgment determine the appropriate treatment.
Bring in the subsidiary, then support every elimination.
Consolidate from the date control is obtained until the date control is lost. The consolidated group includes 100% of the subsidiary's assets, liabilities, income, and expenses, regardless of the parent’s ownership percentage. A change in ownership while control is retained is generally an equity transaction; a loss of control requires deconsolidation analysis.
Conform accounting policies unless a difference is justified, use U.S. GAAP for subsidiary figures in the consolidation, and adopt new Accounting Standards Updates across the consolidated group on the same date and the same transition method. A consistent reporting-date lag of roughly three months or less may be permitted in appropriate circumstances, with material intervening events considered and disclosed.
Eliminate group activity in full, including sister subsidiaries.
Eliminate receivables and payables, sales and purchases, loans and interest, parent investment against subsidiary equity, and dividends. First ensure each entity’s separate financial statements are correct; then eliminate accounts, transactions, and the unrealized intercompany profit that remains within the group.
For inventory still held by the group, eliminate the profit margin only on the unsold portion. Investment-in-subsidiary eliminations and allocation effects depend on the applicable facts, accounting method, VIE or voting-interest model, and the reviewer’s documented approach. A group workflow should show each approved intercompany pair side by side and flag differences for review rather than infer a match.
Keep parent equity and NCI separate.
Present NCI within equity, separately from parent equity, and present income attributable to the parent and NCI. For each presented income-statement period, provide a beginning-to-end reconciliation of each equity caption and NCI in a statement or note. Additional disclosures can apply to subsidiaries, VIEs, private-company alternatives, and deconsolidations.
A consolidated output is not the same as a combined output. Where entities are commonly controlled or managed but do not control each other, the reviewer may conclude that combined statements are the appropriate presentation and must label them clearly.
Keep facts, questions, and review notes together.
Numbers Game can help a firm organize approved ledger data, instructions, and workpaper questions for professional review. It does not independently prepare a GAAP conclusion or replace the person responsible for approval.
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