Rules for consolidating subsidiaries

Under the Halsbury's Laws of England, 'amalgamation' is defined as "a blending together of two or more undertakings into one undertaking, the shareholders of each blending company, becoming, substantially, the shareholders of the blended undertakings.

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This site uses cookies to provide you with a more responsive and personalised service.A parent company can acquire another company by purchasing its net assets or by purchasing a majority share of its common stock.Regardless of the method of acquisition; direct costs, costs of issuing securities and indirect costs are treated as follows: Treatment to the acquiring company: When purchasing the net assets the acquiring company records in its books the receipt of the net assets and the disbursement of cash, the creation of a liability or the issuance of stock as a form of payment for the transfer.In the context of financial accounting, consolidation refers to the aggregation of financial statements of a group company as consolidated financial statements.The taxation term of consolidation refers to the treatment of a group of companies and other entities as one entity for tax purposes.

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