Consolidating Parent and Subsidiary Companies Using the BEN Method

• In Event: Financial Accounting and Reporting 6

Abstract

Eleven advanced accounting textbooks examined for this paper use similar entries and worksheets (herein called the “Traditional Method”), based on “removal of double-counting” and “disaggregation” processes, to consolidate parent and subsidiary companies. This paper introduces an alternative method, called the “BEN Method,” that bypasses the “removal of double-counting” process and permits independent balance-sheet and income-statement consolidations. The BEN Method has an intuitive rationale, uses less data, and requires fewer steps than the Traditional Method. In three surveys, students indicated a statistically- significantly preference for the BEN Method.

Author

• Martin A Leibowitz, Yeshiva University