Problem I

As controller of the Parent Company who is ready to prepare financial statements, you have the following information:

1.You, the Parent Company, have 141 subsidiaries or investees.

2.80 of these subsidiaries are located in the United States and are 100% owned and controlled by you (the Parent.)

3.20 of these companies are located in the United States but you only own 30% of the company.

4.40 of these subsidiaries are 100% owned and are located in the European Union, all of which use IFRS as their accounting framework. 39 of these 40 subsidiaries use the Euro to denominate their financial statements; 1 of the 40 subsidiaries do not use the Euro but use the Polish Zloty PLN to denominate financial statements.

5.One 100% owned subsidiary is in Denmark which does NOT use IFRS but uses Danish GAAP as outlined in the Danish Financial Statements Act of 2019. (See Note below)

REQUIRED:The answer should be in the form of a flowchart. Use 5 basic symbols such as illustrated in the below link.

https://www.edrawsoft.com/flowchart-symbols.html

What are the steps you would use (the Parent Company) to prepare consolidated financial statements for the parent company, the 121 100% owned subsidiaries, and the 20 companies in which you are heavily invested. [Consider IFRS, foreign currency; NCI, the temporal vs. the current rate method, and anything else you think is pertinent.]

NOTE:

https://assets.kpmg/content/dam/kpmg/dk/pdf/DK-2019/09/Overview-of-significant-differences-between-the-Danish-Financial-Statements-Act-and-IFRS.pdf

DANISH GAAP is different from IFRS as of 2019