Consolidation
Consolidation or amalgamation is the act of merging many things into one. In business, it often refers to the mergers or acquisitions of many smaller companies into much larger ones. The financial accounting term of consolidation refers to the aggregated financial statements of a group company as consolidated account. The taxation term of consolidation refers to the treatment of a group of companies and other entities as one entity for tax purposes. Under the Halsbury's Laws of England, 'amalgamation' is defined as "a blending together of two or more undertakings into one undertaking, the shareholders of each blending company, becoming, substantially, the shareholders of the blended undertakings. There may be amalgamations, either by transfer of two or more undertakings to a new company, or to the transfer of one or more companies to an existing company". Thus, the two concepts are, substantially, the same. However, the term amalgamation is more common when the organizations being merged are private schools or regiments.
* Stock Acquisition: a business combination in which the purchasing company acquires the majority, more than 50%, of the Common stock of the acquired company and both companies survive.
* Amalgamation: Means an existing Company which is taken over by another existing company. In such course of amalgamation, the consideration may be paid in cash or in Kind, and the purchasing company services in this process.
Consolidation
In June 2003, the IASB added a project on consolidation to its agenda. The consolidated financial statements of an entity present its assets, liabilities, equity, income, expenses and cash flows together with those of the entities it controls.
The project objective is to publish a single IFRS on consolidation replacing the IAS 27 Consolidated and Separate Financial Statements and the interpretation SIC-12 Consolidation - Special Purpose Entities. The project addresses the following aspects:
1. a revision of the definition of control and related application guidance so that a control model can be applied to all entities.
2. enhanced disclosures about consolidated and unconsolidated entities.
Where are we in the project?
In response to the recommendations of the Financial Stability Board, the IASB’s Board has accelerated its consolidation project and published an exposure draft in December 2008. The exposure draft comment period ended on 20 March 2009.
To read comment letters, click here.
The IASB held round table discussions in June 2009 on its proposals for consolidation and derecognition of financial instruments in North America, Asia and Europe. Round tables were also held for the project in September 2008.
Click here for further information.
The Board began redeliberations of the exposure draft in July and continued redeliberations in October. The tentative decisions taken by the Board at those meetings are included in the full project report. At the October joint meeting, both boards agreed to conduct their respective consolidation projects jointly
Student Loan Consolidation
Consolidation Loans combine several student or parent loans into one bigger loan from a single lender, which is then used to pay off the balances on the other loans. It is very similar to refinancing a mortgage. Consolidation loans are available for most federal loans, including FFELP (Stafford, PLUS and SLS), FISL, Perkins, Health Professional Student Loans, NSL, HEAL, Guaranteed Student Loans and Direct loans. Some lenders offer private consolidation loans for private education loans as well.
A separate page provides a comparison chart of consolidation loan discounts.
Most FFELP lenders are no longer offering consolidation loans because these loans are no longer profitable. Students can still consolidate their loans with the US Department of Education's Federal Direct Loan Consolidation program at loanconsolidation.ed.gov even if their college does not participate in the Direct Loan Program.
Should you consolidate your debt?
Are you wondering whether you should consolidate your bills? Depending on the method you use, consolidation might help you save on interest and get out of debt faster. It can also provide the convenience of one monthly payment instead of many. Consider all the factors, and decide if it's smart to consolidate. Use the Consolidate Your Debt Payment calculator to experiment with different scenarios and develop a plan of action.
