Page 10 - PowerPoint Presentation
P. 10
CONSOLIDATIONS AFTER THE DATE OF ACQUISITION
The elimination of common items
• Bank overdrafts and guarantees
• A bank overdraft of one entity in a group should only be
set off against the favourable bank balance of another
entity in the group if their bank accounts are at the
same bank, and
• the entity with the favourable bank balance guarantees
the bank overdraft of the other entity OR
• the bank itself sets off the two amounts in terms of an
agreement between the two entities and the bank.
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