What is the expected effect if Coca Cola consolidates it financial statements?

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6. Exhibit 13C1-2 contains summarized data regarding Coke's other bottling affiliates (excluding Enterprises) accounted for using the equity method. Discuss the expected effect of:
(i) Full consolidation on Coke's financial statements.

IAS 27 has the twin objectives of setting standards to be applied:
· in the preparation and presentation of consolidated financial statements for a group of entities under the control of a parent; and
· in accounting for investments in subsidiaries, jointly controlled entities, and associates when an entity elects, or is required by local regulations, to present separate (non-consolidated) financial statements.

Key Definitions [IAS 27.4]
Consolidated financial statements: The financial statements of a group presented as those of a single economic entity.
Subsidiary: An entity, including an unincorporated entity such as a partnership, that is controlled by another entity (known as the parent).
Parent: An entity that has one or more subsidiaries.
Control: The power to govern the financial and operating policies of an enterprise so as to obtain benefits from its activities.

Identification of Subsidiaries
Control is presumed when the parent acquires more than half of the voting rights of the enterprise. Even when more than one half of the voting rights is not acquired, control may be evidenced by power: [IAS 27.13]
· over more than one half of the voting rights by virtue of an agreement with other investors; or
· to govern the financial and operating policies of the other enterprise under a statute or an agreement; or
· to appoint or remove the majority of the members of the board of directors; or
· to cast the majority of votes at a meeting of the board of directors.

Presentation of Consolidated Accounts
A parent is required to present consolidated financial statements in which it consolidates its investments in subsidiaries [IAS 27.9] - except in one circumstance: A parent need not present consolidated financial statements if and only if all of the following four conditions are met: [IAS 27.10]
· 1. the parent is itself a wholly-owned subsidiary, or is a partially?owned subsidiary of another entity and its other owners, including those not otherwise entitled to vote, have been informed about, and do not object to, the parent not presenting consolidated financial statements;
· 2. the parent's debt or equity instruments are not traded in a public market;
· 3. the parent did not file, nor is it in the process of filing, its financial statements with a securities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market; and
· 4. the ultimate or any intermediate ...