You are required to write a memorandum to the board of, Accounting Basics

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You are required to write a memorandum to the board of

You are group financial accountant of a diverse group of companies. The board of direc- tors has instructed you to exclude from the consolidated financial statements the results of some loss-making subsidiaries as they believe inclusion will distort the performance of other more profitable subsidiaries.

You are required to write a memorandum to the board of directors explaining the circumstances when a subsidiary can be excluded and the accounting treatment of such excluded subsidiaries.

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