Back to category: Business Limited version - please login or register to view the entire paper. Revenue Consolidation Case: which consolidation method to choose? Read the extracted article about Ahold and discuss the main covered accounting issue. Analyze Biloniti & Tasta Italia Case. Extracted from New York Times (February 25, 2003) Ahold's Accounting Scandal Raises Questions on What's Being Cured By FLOYD NORRIS But another accounting change, which the company said was made after its auditors learned more information about its various international subsidiaries, will reduce reported sales but apparently will not affect profit. Those subsidiaries had previously been consolidated, even though they were not fully owned. That meant all the revenue was reported by Royal Ahold, although it would then deduct from its profit the portion of profit controlled by other investors in the subsidiaries. Now the subsidiaries will be partly consolidated. The effect will be that a subsidiary that was 50 percent owned, with $1 million in sales, would now show as having provided only $500,000 in sales. ... Posted by: Alexander Bartfield Limited version - please login or register to view the entire paper. |
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