Week 2 Discussion Post 16 Document

ControllingFinancialinterestiswhenanindividualorentitybuysor

otherwiseobtainsenoughstocktopointwheretheybecomethe

largestholderinthecompany.Thiscanhappenthroughoriginal

ownershipandacquiringsharesthroughpurchaseortrade.Push

downaccountingissimplyaddingtheobtainedentity'sassetsand

liabilitiestothebuyersornewownersfinancials,bypushingthe

assetsandliabilitiestogetherthenewownerconsolidatesthe

financialstatementsintoasinglecomprehensiveset.Althoughthe

mostcommoneventinimplementingthismethodisuponanew

acquisitionitisalsopossibletodothiswhenthenewcompany

becomestheprimarybeneficiaryofavariableinterestsentity,

meaningtheyhavethecontrollinginterestbutnotthemajorityof

shares.Ibelievethemostimportantconsiderationtodecideon

beforemakingtheelectionisunderstandingthepermanenceofthis

decision.Oncethiscoursehasbeenundertakenthereisnogoing

back.

Sources:

Controlling Interest

https://www.investopedia.com/terms/c/controllinginterest.asp

Implications of Pushdown Accounting

https://www.cpajournal.com/

2018/03/28/implications-pushdown-

accounting/