The document discusses the consolidation of balance sheets for companies H Ltd and S Ltd on various dates when H Ltd acquired shares in S Ltd. It provides the individual balance sheets for H Ltd and S Ltd on the acquisition dates, calculates minority interest, pre-acquisition and post-acquisition profits, and derives the consolidated balance sheet for H Ltd. The calculations are shown for scenarios where H Ltd acquires 5000, 4500, 4000 and 4000 shares in S Ltd on different dates to demonstrate the treatment of minority interest, profits and goodwill in consolidated balance sheet preparation.

1. Good Morning Everybody
Parmil Kumar
Associate Professor Commerce
Govt P.G. College Ambala Cantt.

2. How to prepare consolidated
Balance Sheet
Parmil Kumar
Associate Professor Commerce
Govt P.G. College Ambala Cantt.

3. Balance Sheet of H Ltd & S Ltd on 31 march 2020
(on this date H Ltd acquired 5000 shares in S Ltd)
Liabilities H Ltd S Ltd Assets H Ltd S Ltd
Share Capital( Rs. 100
Each)
20,00,000 5,00,000 Investments(5000 shares
of S Ltd)
5,00,000 --
Reserve 600,000 -- Sundry assets 22,40,000 5,80,000
Trade Payable 140,000 80,000
Totals 27,40,000 5,80,000 Totals 27,40,000 5,80,000

4. Consolidated Balance Sheet of H Ltd on 31 march 2020
Liabilities H Ltd Assets H Ltd
Share Capital( Rs. 100
Each)
20,00,000 Investments 0
Reserve 600,000 Sundry assets 22,40,000+580,000=28,20,000
Trade Payable 140,000+80,000=2,20,000
Minority Interest** 0 *Cost of Control/
Goodwill
( Amount
Paid=5.00,000 –
Capital+ reserve
acquired=500.000
0
Totals 28,20,000 Totals 28,20,000

5. Balance Sheet of H Ltd & S Ltd on 31 march 2020
(on 1.04.2019 H Ltd acquired 5000 shares in S Ltd)
Liabilities H Ltd S Ltd Assets H Ltd S Ltd
Share Capital( Rs. 100
Each)
20,00,000 5,00,000 Investments(5000 shares
of S Ltd)
620,000 --
Reserve
Current year profits
400,000
200,000
40,000
60,000
Sundry assets 21,20,000 6,80,000
Trade Payable 140,000 80,000
Totals 27,40,000 6,80,000 Totals 27,40,000 6,80,000

6. Minority interest
• As all 5000 share are acquired by H Ltd: no Minority Interest

7. Pre acquisition and post-acquisition profits
pre acq=40,000 and post acq=60,000
• Date of Acquisition 1.04.19; means all the profits of S Ltd. on or
before this date are capital profits for H Ltd.=(40000 are capital profit
and H Ltd has 100% of it 40,000 will be taken in calculation of cost of
control)
• Date of Acquisition 1.04.19; means all the profits of S Ltd. After this
date are Revenue profits for H Ltd.=(60000 are Revenue profits and H
Ltd has 100% of it 60,000 will be added to the current year profits of
H Ltd.)

8. Pre acquisition and post-acquisition profits
pre-aqsn. 40,000 and post-acqstn 60,000
S Ltd Profits
40,000 +60,000
Post Acquisition
60,000
H share=60,000
Date of Acquisition 1.04.19
Pre-acquisition
40,000
H share=40,000
Revenue Profit Added
to C.Y Profits
Capital
Profit/Cost of
control

9. Consolidated Balance Sheet of H Ltd on 31 march 2020
Liabilities H Ltd Assets H Ltd
Share Capital( Rs. 100
Each)
20,00,000 Investments 0
Reserve
C. Y Pft. 100% of
Subs100% (60000)
Capital Reserve
600,000
60,000
Sundry assets 21,20,000+680,000=28,00,000
Trade Payable 140,000+80,000=2,20,000
Minority Interest**
0 Share
0% of
(Capital+Reserve)
0 *Cost of Control/
Goodwill
( Amount
Paid=6.20,000 –
100 % of (Capital+
reserve)
acquired=100 %
(500.000+40,000)
= 540,000
(Ans. 80,000)
80,000

10. Balance Sheet of H Ltd & S Ltd on 31 march 2020
(on 1.04.2019 H Ltd acquired 4500 shares in S Ltd)
Liabilities H Ltd S Ltd Assets H Ltd S Ltd
Share Capital( Rs. 100
Each)
20,00,000 5,00,000 Investments(4500 shares
of S Ltd)
620,000 --
Reserve
Current year profits
400,000
200,000
40,000
60,000
Sundry assets 21,20,000 6,80,000
Trade Payable 140,000 80,000
Totals 27,40,000 6,80,000 Totals 27,40,000 6,80,000

11. Minority interest
• As only 4500 share out of 5,000 share of S Ltd are acquired by H Ltd:
means 4500*100/5000=only 90% share are purchased
• It means 10% is Minority Interest
• Minority Interest=10% of (capital + Reserve)=10%(500,000)
+10%(40,000+60,000)or 10%(100.000) =10% (600,000) =60,000
• OR Minority interest=10% of capital+ 10% of Capital profit+ 10% of
Revenue profit = 10% of 500,000 +10% of 40,000 + 10% of 60000
• =50,000+4,000+6,000=60,000
• Means 10% of (capital + all profit) of S Ltd
• Here need not difference b/w capital profit or revenue profits

12. Pre acquisition and post-acquisition profits for H Ltd
S Ltd Profits
40000, +60000
Post Acquisition
60,000
H share=90%=54,000
Date of Acquisition 1.04.19
Pre-acquisition
40,000
H share=90%=36,000
Revenue Profit Added
to C.Y Profits
Capital
Profit/Cost of
control

13. Pre acquisition and post-acquisition profits
• Date of Acquisition 1.04.19; means all the profits of S Ltd. on or
before this date are capital profits for H Ltd.=(40000 are capital profit
and H Ltd has 90% of it 36,000 will be taken in calculation of cost of
control)
• Date of Acquisition 1.04.19; means all the profits of S Ltd. After this
date are Revenue profits for H Ltd.=(60000 are Revenue profits and H
Ltd has 90% of it 54,000 will be added to the current year profits of H
Ltd.)

14. Consolidated Balance Sheet of H Ltd on 31 march 2020
Liabilities H Ltd Assets H Ltd
Share Capital( Rs. 100
Each)
20,00,000 Investments 0
Reserve
C. Y Pft. 90% of
Subs90% (60000)
Capital Reserve
600,000
54,000
Sundry assets 21,20,000+680,000=28,00,000
Trade Payable 140,000+80,000=2,20,000
Minority Interest**
500 Share
10% of
(Capital+Reserve)
60,000 *Cost of Control/
Goodwill
( Amount
Paid=6.20,000 –
90 % of (Capital+
reserve)
acquired=90 %
(500.000+40,000)
= 486,000
134000
134,000

15. Balance Sheet of H Ltd & S Ltd on 31 march 2020
(on 1.04.2019 H Ltd acquired 4000 shares in S Ltd)
Liabilities H Ltd S Ltd Assets H Ltd S Ltd
Share Capital( Rs. 100
Each)
20,00,000 5,00,000 Investments(4000 shares
of S Ltd)
620,000 --
Reserve
Current year profits
400,000
200,000
40,000
60,000
Sundry assets 21,20,000 6,80,000
Trade Payable 140,000 80,000
Totals 27,40,000 6,80,000 Totals 27,40,000 6,80,000

16. Pre acquisition and post-acquisition profits
• Date of Acquisition 1.04.19; means all the profits of S Ltd. on or
before this date are capital profits for H Ltd.=(40000 are capital profit
and H Ltd has 80% of it 32,000 will be taken in calculation of cost of
control)
• Date of Acquisition 1.04.19; means all the profits of S Ltd. After this
date are Revenue profits for H Ltd.=(60000 are Revenue profits and H
Ltd has 80% of it 48,000 will be added to the current year profits of H
Ltd.)

17. Minority interest
• As only 4000 share are acquired by H Ltd: means 4000*100/5000=
80% share
• 20% is Minority Interest
• Minority Interest=20% of (capital + Reserve)=20%(500,000)
+20%(40,000+60,000)or 20%(100.000) =20% (600,000) =1,20,000
• OR Minority interest=20% of capital+ 20% of Capital profit+ 20% of
Revenue profit = 20% of 500,000 +20% of 40,000 + 20% of 60000
• =100,000+8,000+12,000=1,20,000
• Means 20% of (capital + all profit) of S Ltd
• Here need not difference b/w capital profit or revenue profits

18. Pre acquisition and post-acquisition profits for H Ltd
S Ltd Profits
40000, +60000
Post Acquisition
60,000
H share=80%=48,000
Date of Acquisition 1.04.19
Pre-acquisition
40,000
H share=80%=32,000
Revenue Profit Added
to C.Y Profits
Capital
Profit/Cost of
control

19. Consolidated Balance Sheet of H Ltd on 31 march 2020
Liabilities H Ltd Assets H Ltd
Share Capital( Rs. 100
Each)
20,00,000 Investments 0
Reserve
C. Y Pft. 80% of
Subs80% (60000)
Capital Reserve
600,000
48,000
Sundry assets 21,20,000+680,000=28,00,000
Trade Payable 140,000+80,000=2,20,000
Minority Interest**
1000 Share
20% of
(Capital+Reserve)
1,20,000 *Cost of Control/
Goodwill
( Amount
Paid=6.20,000 –
80 % of (Capital+
reserve)
acquired=80 %
(500.000+40,000)
= 4,32,000
1,88,000
Totals 29,88,000 Totals 29,88,000

20. Balance Sheet of H Ltd & S Ltd on 31 march 2020
(on 1.09.2019 H Ltd acquired 4000 shares in S Ltd)
Liabilities H Ltd S Ltd Assets H Ltd S Ltd
Share Capital( Rs. 100
Each)
20,00,000 5,00,000 Investments(4,000 shares
of S Ltd)
620,000 --
Reserve
Current year profits
400,000
200,000
40,000
60,000
Sundry assets 21,20,000 6,80,000
Trade Payable 140,000 80,000
Totals 27,40,000 6,80,000 Totals 27,40,000 6,80,000

21. Pre acquisition and post-acquisition profits
• Date of Acquisition 1.09.19; means all the profits of S Ltd. on or
before this date are capital profits for H Ltd.=(40000 before1.04.19+ 6
months profits of current year=60000*6/12=30,000) =70,000 are
capital profit and H Ltd has 80% of share=80%of 70,000= 56,000 will
be taken in calculation of cost of control)
• Date of Acquisition 1.09.19; means all the profits of S Ltd. After this
date (6 months) are Revenue profits for H Ltd.=(60000*6/12=30,000
are Revenue profits and H Ltd has 80% of it,=80%of 30,000= 24,000
will be added to the current year profits of H Ltd.)

22. Pre acquisition and post-acquisition profits
S Ltd Profits
40000, +60000
Post Acquisition
60,000*6/12=30000
H share=80%of 30,000 =24,000
Min. share=20%=60000
Date of Acquisition 1.09.19
Pre-acquisition
40,000+60000*6/12
=40000+30000= 70,000
H share=80%of70000=56,000
Min.share=20%=14,000
Revenue Profit Added
to C.Y Profits
Capital
Profit/Cost of
control

23. Minority interest
• As only 4000 share are acquired by H Ltd: means 4000*100/5000=
80% share
• 20% is Minority Interest
• Minority Interest=20% of (capital + Reserve)=20%(500,000)
+20%(40,000+60,000)or 20%(100.000) =20% (600,000) =1,20,000
• OR Minority interest=20% of capital+ 20% of Capital profit+ 20% of
Revenue profit = 20% of 500,000 +20% of 70,000 + 20% of 30000
• =100,000+14,000+6,000=1,20,000
• Means 20% of (capital + all profit) of S Ltd
• Here need not difference b/w capital profit or revenue profits

24. Consolidated Balance Sheet of H Ltd on 31 march 2020
Liabilities H Ltd Assets H Ltd
Share Capital( Rs. 100
Each)
20,00,000 Investments 0
Reserve
C. Y Pft. 80% of Subs)
80% (30,000)
600,000
24,000
Sundry assets 21,20,000+680,000=28,00,000
Trade Payable 140,000+80,000=2,20,000
Minority Interest**
1000 Share
20% of
(Capital+Reserve)
120,000 *Cost of Control/
Goodwill
( Amount
Paid=6.20,000 –
80 % of (Capital+
reserve)
acquired=80 %
(500.000+40,000+
60000*6/12)=
80%(5,70,000)=
4,56,000
164,000
Totals 29,64,000 Totals 29,64,000