Union Pacific Corporation
Union Pacific Corporation is an American holding organization with the leading subsidiary in railway industry, Union Pacific Railroad Company. Established in 1862, the company has occupied 168th position in Forbes 2000 ranking and 86th position in Forbes ranking of market value in 2015 with market capitalization of almost USD 94 billion. Additionally, the Railroad’s expanded operation mix consists of Agricultural Products, Automobile, Chemicals, Coal, Industrial Products and Intermodal (Forbes, 2015). Union Pacific Corporation’s major subsidiaries include Insight Network Logistics (automobile logistics amenities and technology distributor focusing on wide-ranging vehicle supply schemes), PS Technology, Inc. (company’s staff management software supplier focusing on rail crew supervision and promptness solutions), ShipCarsNow (national transportation network of safe, dependable rail carters and auto carriers all over the U.S.), ShipmentVision (rail transportation management service), Streamline (door-to-door intermodal amenities exploiting advanced technologies to reduce the difficulty related to the drayage, tackle management, reservations and processes performance) and Union Pacific Distribution Services (logistics functioning subsidiary focusing on amenities that characterize transportation by rail) (Union Pacific, 2016).
ExxonMobil Corporation
ExxonMobil Corporation is one of the largest and best-known oil producers in the world. ExxonMobil actually leads oil extraction worldwide. This is one of the largest corporations by market capitalization, which competes only with the Chinese PetroChina, also operating in the oil and gas industry, and the American manufacturer of electronics, Apple Inc. The company has divided its business into four divisions, namely Upstream, Chemical, Downstream and Natural Gas and Power Marketing (ExxonMobil Corporation, 2015). Its major subsidiaries include ExxonMobil France Holding SAS, ExxonMobil Australia and the UK Esso Petroleum Co. Ltd. Among others, Imperial Oil Ltd., XTO Energy, Inc., Mobil Producing Nigeria Unlimited (MPN), RasGas Company Ltd. and Aera Energy, LLC belong to totally-owned affiliates (Carpenter, 2015).
An important feature of a group of related companies is the availability of unified control over the assets and operations of its member companies and the possibility of exercising decisive influence on the financial and economic activity. Speaking about consolidation of majority-owned subsidiaries, it is worth noting that ExxonMobil does not consolidate them in case the lesser number of shareholders have the right to take part in crucial management decisions. It is about the right to agree operating guidelines, cost budgets, funding and investment plans, and executive reward and succession plans. The company does consolidate several mutable interest entities, despite the fact that ExxonMobil has below majority proprietorship consistent with its Form 10-K due to assurances or other measures that generate common economic interests in those subsidiaries that are larger than the Exxon’s voting interests (ExxonMobil Corporation, 2015).
ExxonMobil applies the equity method, in accordance with which each reporting period the initial value of the investment is adjusted for the company’s performance, which shares have been acquired, cost technique, and fair value method to make up investments in the ordinary share of organizations, in which ExxonMobil has beneath majority proprietorship. The main advantage of the equity method is that it provides comparability between reporting data consolidated with subsidiary company and reporting data on investments, which are not included in the consolidation, but have some of the characteristics of investments in subsidiary. Fair value method is used only to strictly defined property (investment property, biological assets, financial instruments, and assets to be disposed) or transactions (business mix, revaluation of fixed assets, free receipt of values, etc.) (ExxonMobil Corporation, 2015).
References
Carpenter, J. W. (2015). Top 5 Companies Owned by Exxon Mobil (XOM). Retrieved 6 November 2015 from http://www.investopedia.com/articles/markets/101315/top-5-companies-owned-exxon-mobil.asp [Accessed: 18 February 2016]
ExxonMobil Corporation (2015). Financial Statements and Supplemental Information 2014. Retrieved from http://cdn.exxonmobil.com/~/media/Global/Files/Investor-Reports/2015/2014-Financials.pdf [Accessed: 18 February 2016]
Forbes (2015). The World’s Biggest Public Companies. Retrieved from http://www.forbes.com/companies/union-pacific/ [Accessed: 18 February 2016]
Union Pacific (2016). UP Affiliated Websites. Retrieved from http://www.up.com/aboutup/corporate_info/up-sites/index.htm [Accessed: 18 February 2016]
