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(154)-CANCELLATION AND PART CANCELLATION

Friday, April 16, 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 requiring cancellation may include the asset “shares in subsidiary companies” which appears in the parent company’s accounts will be matched with the liability share capital in the subsidiaries accounts.

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