Consolidation of Accounts

The development of the syllabus will be carried out, as much as possible, using active methods, which involve student participation and the promotion of a theoretical-practical perspective on the topics and an approach based on know-how. To this end, the explanation of the theoretical and conceptual foundations of the subjects will be combined with the analysis of real cases and the resolution of pedagogical exercises (individually or in groups), making a constant appeal to students’ assessments, to encourage reasoning and critical thinking.

It therefore includes the following methodologies:

Theoretical-practical teaching: alternating between the exposition of fundamental theoretical concepts with practical exercises; exemplification with real cases. Furthermore, the proposed assessment includes group activities that encourage interaction, mutual help, consultation of class materials and student research in any form and their interpretation/application to the class case (e.g., GPT Chat).

Tutorial teaching: clarification of doubts.

Autonomous study: reading the bibliography and solving recommended exercises.

This course has the following objectives:

O1. Study different ways of business combinations and specific needs of groups.

O2. Distinguish the types of financial holdings and know the applicable methods, in individual and consolidated accounts.

O.3 Study the concepts, rules and methodology applicable in the preparation of consolidated financial statements, according the Portuguese accounting standards.

Students should acquire the following skills:

C1. Knowing what motivates business combinations and their typology.

C2. Being able to identify the different participations between companies, arising from shareholdings, and when there is a group, and what accounting treatment is applicable in each case.

C3. Distinguishing between individual and consolidated financial information.

C4. Understanding the methodology to be followed in the consolidation process and understand the meaning of the specific items of the consolidated financial statements.

C5. Knowing how to distinguish between consolidation for accounting and tax purposes.

1 – Introductory aspects

1.1 Business combinations

1.2 Groups of companies

1.3 Consolidation of financial statements – concepts, objectives, advantages, limitations and theories

1.4 Consolidation set and consolidation perimeter

2 – Combinations of business activities (CBA)

2.1 Concept and identification one CBA

2.2 Purchase method

3 – Financial participations and applicable methods

3.1 Types of financial participations

3.2 Accounting methods

4 – Process of consolidation of Financial Statements

4.1 Consolidation perimeter – mandatory, exemptions and exclusions

4.2 Operations prior to consolidation – temporal, valuation, and monetary homogenizations

4.3 Consolidation procedures – aggregation and eliminations

4.4 Consolidated FS

4.5 Consolidation documents

5 – Particular cases

5.1 Variation in the percentage of participation and control

5.2 Reciprocal participation

5.3 Consolidation techniques in indirect control

6 – Distinction between accounting and tax consolidation