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(151)-CANCELLATION AND PART CANCELLATION

Monday, April 12, 2010

Cancellation and Part Cancellation

The preparation of a consolidated balance sheet, in a very simple form, consists of two procedures.
  1. Take the individual accounts of the holding company and each subsidiary and cancel out items which appear as an asset in one company and a liability in another.
  2. Add together all the uncancelled assets and liabilities throughout the group.


Items require cancellation may include the asset “share in subsidiary companies” which appear in the parent company’s accounts will be matched with the liability “share capital” in the subsidiaries’ accounts.

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