This course provides a clear, illustrated explanation of how to prepare consolidated financial statements, as preparation for Question 2 of the Level 2 Nissei Bookkeeping Examination.

You will learn everything you need to know to prepare a consolidated income statement and consolidated balance sheet, including consolidation adjustment entries when gaining control, amortization of goodwill, non-controlling interests, net income/loss of subsidiaries, dividend adjustments, offsetting of intercompany transactions, elimination of unrealized profits, offsetting of receivables and payables, and adjustments to allowance for doubtful accounts. ✨
This is recommended for reviewing after you have learned consolidated accounting, or as preparation for Question 2 before the exam. 😊

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📝After the lecture, try practicing for Question 2.
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Once you have confirmed the flow of consolidated financial statements, let's try some practice problems for Question 2.

▶Nissei Bookkeeping Level 2 Question 2 Preparation
【日商簿記2級】第2問対策｜連結会計・株主資本等変動計算書・有価証券

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✅What you will learn from this video
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• Overview of Consolidated Financial Statements
• How to Prepare a Consolidated Income Statement
• How to Prepare a Consolidated Balance Sheet
• Consolidation Adjustment Entries at the Time of Acquisition of Control
• Offsetting and Eliminating Investments and Capital
• Calculation and amortization of goodwill
• Calculation of non-controlling interests
• Transfer of net income/loss for subsidiaries
• Adjustment of dividends for subsidiaries
• Offsetting and elimination of sales and cost of goods sold
• Elimination of unrealized profits
• Offsetting and elimination of accounts receivable and accounts payable
• Adjustment of allowance for doubtful accounts
• Preparation for question 2 of consolidated accounting

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✅ How to solve consolidated financial statements
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In consolidated financial statements, the parent company and subsidiaries are considered as a single company group.
When solving problems, organize your thoughts in the following way.
① Add up the figures for the parent company and subsidiary.
↓ ② Offset and eliminate investments and capital.
↓ ③ Calculate and amortize goodwill.
↓ ④ Calculate non-controlling interests.
↓ ⑤ Adjust the subsidiary's net income/loss and dividends.
↓ ⑥ Eliminate intercompany transactions and receivables/payables.
↓ ⑦ Complete the consolidated income statement and consolidated balance sheet.

✅ Consolidated Income Statement: Shows revenue, expenses, and profits when the parent company and subsidiary are viewed as a single company group.

✅ Consolidated Balance Sheet: Shows the assets, liabilities, and equity of the entire company group.

When preparing consolidated financial statements, it's important not to try to create a complete version all at once, but rather to build up the consolidation adjustment entries one by one. 😊

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✅Table of Contents
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0:02 About Consolidated Financial Statements
1:04 How to Solve Consolidated Financial Statements
2:12 Consolidation Adjustment Entries at the Time of Acquisition of Control
5:39 Consolidation Adjustment Entries for the First Year of Consolidation
8:48 Amortization of Goodwill
9:53 Transfer of Net Income/Loss of Subsidiaries
10:55 Adjustment of Dividends of Subsidiaries
13:24 Offsetting and Eliminating Sales Revenue and Cost of Goods Sold
14:41 Elimination of Unrealized Profits - Downstream
17:37 Offsetting and Eliminating Accounts Receivable and Accounts Payable
19:03 Adjustment of Allowance for Doubtful Accounts
21:18 Preparation of Consolidated Income Statement
27:02 Preparation of Consolidated Balance Sheet
30:52 Summary | How to Solve Consolidated Financial Statements
32:45 Supplementary Video on Consolidated Accounting
33:53 Video for Nissei Bookkeeping Level 2 Exam Preparation
34:09 About Nissei Bookkeeping Level 2 Lecture Videos

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📘 Review Consolidated Accounting from the Basics
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If you want to review the basics of consolidated accounting, please use this lecture.

▶Consolidated Accounting ① | Date of Acquisition of Control and Goodwill
【日商簿記２級】『商業簿記　第１６回』連結会計①（連結財務諸表/支配獲得日の連結会計...

▶Consolidated Accounting ② | Consolidation After the Date of Acquisition of Control
【日商簿記２級】『商業簿記　第１７回』連結会計②（支配獲得日後１年目の連結/支配獲得...

▶Consolidated Accounting ③ | Intercompany Transactions and Offsetting of Receivables and Payables
【日商簿記２級】『商業簿記　第１８回』連結会計③（内部取引高の相殺/債権・債務の相殺...

▶Consolidated Accounting ④ | Elimination of Unrealized Profits
【日商簿記２級】『商業簿記　第１９回』連結会計④（未実現利益の消去/ダウンストリーム...

Please use these resources if you wish to learn commercial bookkeeping for the Level 2 Nissei Bookkeeping Examination in order.

▶Nissho Bookkeeping Level 2 Commercial Bookkeeping Lecture Playlist
【2026年度版】日商簿記2級 商業簿記講義｜知識ゼロから合格へ

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📝Prepare for the Actual Exam in One Go
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Here is the...