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Théorie des graphes, participation réciproque et consolidation
[Graphs theory, reciprocal stockholding in accounting consolidation]

Author

Listed:
  • Guérin, Michel
  • Pouget, Jean

Abstract

: Until this article published by the journal of French CPA, the regular computation of shareholding interests in consolidating financial accounts for large groups was to cut the financial link when there were reciprocal or circular participation. This article has radically changed the method by using a matrix algebra algorithm and also with the use of a fictitious mother holding company. Before this new method, the usual computation was mathematically wrong. The use of a matrix method, as it is here explained, gives easily all the correct percentages of interests when consolidating a group with complex subsidiaries. Furthermore the method of matrix algebra allows to reconcile all the interco flows and all reciprocal statement accounts.

Suggested Citation

  • Guérin, Michel & Pouget, Jean, 1972. "Théorie des graphes, participation réciproque et consolidation [Graphs theory, reciprocal stockholding in accounting consolidation]," MPRA Paper 74388, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:74388
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    File URL: https://mpra.ub.uni-muenchen.de/74388/1/MPRA_paper_74388.pdf
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    More about this item

    Keywords

    financial accounting; accounting-consolidation; reciprocal and circular stockholding; matrix algebra accounting;
    All these keywords.

    JEL classification:

    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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