Should the operating income of a subsidiary be included in the consolidated income statement as ope

Consolidated statements. It is necessary to first consider the issue of purchase and sale offsetting between parent and subsidiary. The business between the parent and the subsidiary should be offset and included in the consolidated working paper, rather than the entire turnover of the subsidiary. Operating income of subsidiaries other than internal transactions.

It should be included in the parent company's statements in full.

Investment income in parent and subsidiary.

The core of the offsetting is that the subsidiary recognizes the profit distribution on the individual statement when it realizes the profit.

Accordingly, surplus reserves, profits payable, and undistributed profits are formed.

End. Subsidiaries are based on the net profit of the subsidiary.

Borrow: Profit Distribution – Cash dividends payable.

Credit: Dividends payable.

Borrow: Profit distribution - withdrawal of surplus reserves.

Credit: Surplus Reserve.

Finally, the undistributed profit at the end of the year is formed.

Since the parent subsidiary is based on the equity method.

accounting, so the investment income on the subsidiary will also be recognized in the accounts of the parent company:

Borrow: Long-term equity investment.

Profit and loss adjustment (net profit of subsidiaries).

Credit: Investment income.

This part of the investment income is combined with the company's profits, and then the surplus reserve and payable profits are withdrawn, and the undistributed profits are formed at the same time. In this way, the parent company is based on its own company's net profit (which includes the net profit of the subsidiary).

Borrow: Profit Distribution – Cash dividends payable.

Credit: Dividends payable.

Borrow: Profit distribution - withdrawal of surplus reserves.

Credit: Surplus Reserve.

Finally, the undistributed profit at the end of the year is formed.

However, from the group's point of view, if the parent and subsidiary have all treated the same investment income, it is equivalent to repeating it, and the parent company believes that the treatment of the subsidiary is redundant from the group's point of view, so it should be offset when compiling the consolidated financial statements.

The significance of this entry is: the parent company's investment income in the subsidiary and the minority shareholder's profit or loss.

The sum of the subsidiaries' profit distribution items is offset against each other, and the statement of changes in owners' equity is consolidated.

Therefore, the amount of profit distribution items in the statement of changes in individual owners' equity of the subsidiary, including the amount of surplus reserve, distribution of profit and undistributed profit at the end of the period, must be offset.

The principle followed by the offsetting entry is: the undistributed profit of the subsidiary at the beginning of the period + the income realized by the subsidiary in the current period (including the income of the parent company and the income of minority shareholders) The amount of profit distribution of the subsidiary in the current year + the undistributed profit at the end of the period, of which the investment income of the parent company The net profit realized by the subsidiary in the current period The shareholding ratio of the parent company.

The entries for the withdrawal of surplus reserves by subsidiaries are:

Borrow: Profit distribution - withdrawal of statutory surplus reserve, withdrawal of arbitrary surplus reserve.

Credit: Surplus Reserve.

The debit amount of this entry is included in the statement of changes in the subsidiary's owner's equity to the withdrawal of surplus reserve, so the offsetting is offset from the credit side. The distribution to the owner (or shareholder) is similar.

Of course, operating income. The consolidated statements should be considered at the level of the group as a whole, whether the parent company or the subsidiary is part of the group, and whose income is income. The investment income in the consolidated statement is the investment income from foreign investment and the investment income of units outside the group.

Summary. If the net profit of the subsidiary is reflected in the investment income of the parent company in a separate statement, then this part of the investment income is not consolidated into the investment income of the consolidated statement. When preparing the consolidated statements, it is necessary to consolidate the financial statements of the subsidiary with the statements of the parent company, including the consolidation of its net profit, which means that the net profit of the subsidiary has been reflected in the income statement of the parent company through the consolidated statements, and is no longer separately included in the investment income of the parent company.

The net profit of the subsidiary, 100% wholly-owned subsidiary, is incorporated into the consolidated income statement, should it be included in the consolidated statement of "operating profit or "investment income"?

Hello dear, if all the companies are incorporated into the consolidated income statement, their net profits should be recorded as operating profits, not investment income. This is because the net profit of a wholly-owned subsidiary is the income from the company's business activities, not the income from investment activities. The consolidated income statement reflects the operating performance of the entire group, so the net profit of wholly-owned subsidiaries should be included in it.

However, the net profit of the subsidiary, which is reflected in the investment income of the parent company, is equivalent to the investment income of the parent company that does not need to be consolidated into the consolidated statements?

If the net profit of the subsidiary is reflected in the investment income of the parent company in a separate statement, then the investment income after the lease is not included in the investment income of the consolidated statement. When preparing the consolidated financial statements, it is necessary to consolidate the financial statements of the subsidiary with the financial statements of the parent company, including the consolidation of its net profit, which means that the net profit of the subsidiary has been reflected in the income statement of the parent company through the consolidated statements, and is no longer separately included in the investment income of the parent company.

Summary. Hello, glad to answer for you. Because we adjusted the cost method to the equity method when preparing the consolidated financial statements, the parent company has recognized a profit through "investment income".

However, at this time, the subsidiary also has its own profits, so there will be an additional "investment income" recognized by the parent company at the consolidated statement level, so it should be offset. In other words, this is based on the need for income statement adjustment, and from the perspective of the owners of the group as a whole, the profit distribution between parent and subsidiary is an internal transaction and should be offset.

Hello, I'm glad to answer your questions. Because we adjusted the cost method to the equity method when preparing the consolidated simplified financial statements, the parent company has recognized a profit through "investment income". However, at this time, the subsidiary also has its own profits, so there will be an additional "investment income" recognized by the parent company at the consolidated statement level, so it should be offset.

In other words, this is based on the need for profit adjustment and the need for profit adjustment, and from the perspective of the overall owner of the group, the profit distribution between the parent and subsidiary is an internal transaction and should be offset.

Hello, glad to answer for you. Consolidated financial statements refer to the statements prepared by the parent company, which comprehensively reflect the overall financial status, operating results and cash flow of the enterprise group, with the enterprise Qiyuan Group, formed by the parent and subsidiary, as the accounting entity of Gaosun Collapse. A parent company is a business with one or more subsidiaries; A subsidiary is a business that is controlled by a parent company.

The parent company shall be a holding enterprise that has obtained the legal personality of the enterprise in accordance with the law.

Can a group company pay corporate income tax after consolidating the profits and losses of its subsidiaries? No. 1. The difference between a subsidiary and a branch:

1. A subsidiary refers to a company whose shares are controlled by another company or actually controlled or controlled by another company in accordance with an agreement. The subsidiary has an independent legal personality, owns its own property, its own company name, articles of association and board of directors, carries out business activities in its own name, engages in various civil activities, and independently bears all the consequences and responsibilities caused by the company's actions. 2. A subsidiary is different from a branch, which refers to a branch that is under the jurisdiction of the company in terms of business, capital, personnel, etc., and does not have legal personality.

A branch is a branch and has no legal or economic independence, and is only a subsidiary of the head office. II. Applicable Provisions of Income Tax for Subsidiaries and Branches1. Subsidiaries are separate companies, and according to Article 50 of the Enterprise Income Tax Law, unless otherwise provided by tax laws and administrative regulations, resident enterprises shall take the place of enterprise registration as the place of tax payment; However, if the place of registration is overseas, the place of taxation shall be the place where the actual management agency is located. If a resident enterprise establishes a business establishment within the territory of China that does not have the status of a legal person, it shall calculate and pay the enterprise income tax on a consolidated basis.

Article 52 Unless otherwise specified, enterprises shall not pay enterprise income tax together. The tax law clearly stipulates that the subsidiary can pay enterprise income tax in combination with the head office. 2. According to the provisions of Announcement No. 57 of 2012 of the State Administration of Taxation, if a resident enterprise establishes a branch without legal person qualification across regions within the territory of China, it shall implement the enterprise income tax collection and management measures of "unified calculation, hierarchical management, local prepayment, summary liquidation, and financial adjustment".

Therefore, only the Xizheng branch is applicable to the consolidated payment of enterprise income tax. 3. In summary, the group company cannot pay enterprise income tax after combining the profits and losses of its subsidiaries.

The above is the lawyer's question on whether the group company can pay enterprise income tax after merging the profits and losses of each subsidiary, I hope it will be helpful to you.

Rational and prudent interpretation of offsetting entries for investment income and net profit realized by subsidiaries.

The offsetting of investment income in the parent and subsidiary, the core service is that the subsidiary recognizes the profit distribution on the individual statement when realizing the profit, and also accrues the surplus reserve and payable profit accordingly, and forms the undistributed profit of the current period, which is included in the undistributed profit at the end of the year. At the same time, undistributed profits are formed. However, from the group's point of view, the same investment income has been treated by the parent and subsidiary, which is equivalent to repeating it, and the parent company believes that the treatment of the subsidiary is redundant from the perspective of the group, so it should be offset when compiling the consolidated statements, because the normal treatment of the subsidiary at that time was:

Borrow: Profit distribution.

Credit: Profit Distribution - Withdrawal of surplus reserves.

Dividends payable. Undistributed profit (undistributed profit realized in the current period).

Therefore, when offsetting, there is no profit distribution on the consolidated statement, so it is removed, and it becomes.

Borrow: Investment income.

Undistributed profit – at the beginning of the year.

Credit: Withdrawal of surplus reserves.

Dividends payable. Undistributed profit - year-end (the year-end minus the beginning of the year reflects the undistributed profit realized in the current period, because for the undistributed profit, the year-end and the beginning of the year recorded in the individual financial statements do not have the number of occurrences in the current period, so the year-end minus the beginning of the year is used to squeeze out the number of occurrences in the current period).

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Yes. The consolidated statements include the parent company and all holding subsidiaries, but excludes branches that are not independent legal entities. The content of the merger is not only assets and profits, but also equity.

The main items of the consolidated balance sheet offset: owners' equity, internal claims and debts, inventory, fixed assets, intangible assets, and surplus reserves.

The items that need to be offset in the consolidated income statement and profit distribution statement mainly include: internal sales revenue, internal sales cost, bad debt provision, internal interest, internal investment income, and withdrawal of surplus reserve.

Including the assets and profits of all subsidiaries included in the scope of consolidation, generally holding subsidiaries.

According to the relevant provisions of Articles 6 to 10 of Chapter II of the Accounting Standards for Business Enterprises No. 33 - Consolidated Financial Statements, the scope of consolidation of consolidated financial statements should be determined on the basis of control.

1) If the parent company directly or indirectly through a subsidiary owns more than half of the voting rights of the investee, indicating that the parent company is able to control the investee, the investee shall be recognized as a subsidiary and included in the scope of consolidation in the consolidated financial statements. However, there is an exception where there is evidence that the parent company cannot control the investee.

2) If the parent company has half or less of the voting rights of the investee and meets one of the following conditions, the parent company shall be deemed to be able to control the investee, unless there is evidence that the parent company cannot control the investee:

Through agreements with other investors of the investee, it has more than half of the voting rights of the investee.

According to the articles of association or agreement, it has the right to decide on the financial and operational policies of the investee.

The right to appoint and dismiss a majority of the members of the board of directors or similar body of the investee.

Majority voting rights on the board of directors or similar body of the investee.

3) When determining whether the investee can be controlled, consideration should be given to the potential voting rights such as the current convertible corporate bonds and executable warrants of the investee held by the investment enterprise and other enterprises.

4) All subsidiaries should be included in the consolidated scope of the parent company's consolidated financial statements.

That is, as long as the subsidiary is controlled by the parent company, regardless of the size of the subsidiary, whether the subsidiary's ability to transfer funds to the parent company is severely restricted, and whether the business nature of the subsidiary is significantly different from that of the parent company or other subsidiaries in the enterprise group, it should be included in the scope of consolidation in the consolidated financial statements.

It should be noted that an overseas subsidiary that is subject to the foreign exchange control and other controls of the country where it is located, and the Company can also obtain benefits from its business activities, and the overseas subsidiary whose capital allocation is restricted, in this case, if the financial and operational policies of the investee are still determined by the Company, the Company can also obtain benefits from its business activities, and the restriction on capital dispatch does not prevent the Company from exercising control over it, and it should be included in the scope of consolidation of the consolidated financial statements.

The following investees are not subsidiaries of the parent company and should not be included in the consolidated financial statements of the parent company:

Atomic companies that have been declared liquidated and rectified;

Atomic companies that have been declared bankrupt;

Other investees that the parent company cannot control.

Other investees that cannot be controlled by the parent company refer to other investees other than those mentioned above that the parent company cannot control, such as joint ventures.