Consolidating U.S. and Foreign subsidiary financial statements: Is the consolidated information useful? Two of the objectives of this course are as follows: • CO1 Demonstrate the accounting treatment for consolidations and related issues. • CO2 Demonstrate the accounting treatment of issues involving foreign currency.

Consolidating U.S. and Foreign subsidiary financial statements: Is the consolidated information useful?

Two of the objectives of this course are as follows:
• CO1 Demonstrate the accounting treatment for consolidations and related issues. 
• CO2 Demonstrate the accounting treatment of issues involving foreign currency. 
The following article incorporates issues related to consolidations and the treatment of foreign currency. In our ever-changing global environment consolidations with foreign subsidiaries are becoming increasingly common. The research project for this course allows you to consider whether consolidating foreign operations with U.S. companies provides relevant information for stakeholders. 

Read the following article:
Holt, P. E. (2004) A case against the consolidation of foreign subsidiaries’ and a United States parent’s financial statements. Accounting Forum, Volume 28, Issue 2, June 2004, Pages 159-165

The author concludes that consolidating U.S. and foreign-based financial statements masks useful information. In the near term however all countries will operate using IFRS. 

Your primary goal is to address the author’s conclusion. You are not required to agree with the author. You should support your position with a well-reasoned argument. 

Questions to consider:
• Do you agree with the author’s conclusion? Explain. Support your response with a rationale, well-reasoned explanation. 
• Do you believe convergence to IFRS addresses the author’s concerns? Explain. Support your response with a rationale, well-reasoned explanation. 
• Does the U.S. and the International community need to reconsider the role of consolidated financial statements? The value relevance of consolidated statements? 
• What alternative might you suggest? Explain. Support your response with a rationale, well-reasoned explanation.
The paper is to be 5–7 pages (of content) long and prepared in accordance with APA guidelines. There should also be a 1–2 paragraph abstract and a bibliography (reference page) of current relevant sources that are used and cited in the paper. The paper is to be submitted via the course Dropbox no later than May 2, 2013. 

Note: the paper should be well organized, well referenced, and free from spelling and grammatical errors. Wikipedia is NOT a reliable source.
 
Related articles:
Does the Control-based Approach to Consolidated Statements Better Reflect Market Value than the Ownership-based Approach? 
The International Journal of Accounting, Volume 47, Issue 2, June 2012, Pages 198-225
Audrey Wen-hsin Hsu, Rong-Ruey Duh, Kang Cheng

Discussion of “Does the Control Based Approach to Consolidated Statements Better Reflect Market Value Than the Ownership-based Approach?”
The International Journal of Accounting, Volume 47, Issue 2, June 2012, Pages 226-231
Suresh Radhakrishnan

Response to Discussant of “Does the Control Based Approach to Consolidated Statements Better Reflect Market Value than the Ownership-based Approach?”
The International Journal of Accounting, Volume 47, Issue 2, June 2012, Pages 232-234
Rong-Ruey Duh, Audrey Wen-hsin Hsu
 Value relevance of consolidated versus parent company financial statements: Evidence from the largest three European capital markets
MÜLLER, Victor-Octavian. Accounting and Management Information Systems10. 3 (Sep 2011): 326-350.

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