C5 3 consolidating an unprofitable subsidiary

Posted by / 21-Jan-2020 02:53

C5 3 consolidating an unprofitable subsidiary

[IFRS 10:4B] Consolidation procedures Consolidated financial statements: [IFRS 10: B86] A reporting entity includes the income and expenses of a subsidiary in the consolidated financial statements from the date it gains control until the date when the reporting entity ceases to control the subsidiary.

Income and expenses of the subsidiary are based on the amounts of the assets and liabilities recognised in the consolidated financial statements at the acquisition date.

This site uses cookies to provide you with a more responsive and personalised service.

By using this site you agree to our use of cookies.

An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. An investor must be exposed, or have rights, to variable returns from its involvement with an investee to control the investee.

[IFRS 10:5-6; IFRS 10:8] An investor controls an investee if and only if the investor has all of the following elements: [IFRS 10:7] Power arises from rights. Such returns must have the potential to vary as a result of the investee's performance and can be positive, negative, or both.

When the proportion of the equity held by non-controlling interests changes, the carrying amounts of the controlling and non-controlling interests area adjusted to reflect the changes in their relative interests in the subsidiary.

IFRS 10 Consolidated Financial Statements outlines the requirements for the preparation and presentation of consolidated financial statements, requiring entities to consolidate entities it controls.

Control requires exposure or rights to variable returns and the ability to affect those returns through power over an investee.

IFRS 10 was issued in May 2011 and applies to annual periods beginning on or after 1 January 2013.

The difference between the date of the subsidiary's financial statements and that of the consolidated financial statements shall be no more than three months [IFRS 10: B92, IFRS 10: B93] Non-controlling interests (NCIs) A parent presents non-controlling interests in its consolidated statement of financial position within equity, separately from the equity of the owners of the parent.

[IFRS ] A reporting entity attributes the profit or loss and each component of other comprehensive income to the owners of the parent and to the non-controlling interests.

c5 3 consolidating an unprofitable subsidiary-61c5 3 consolidating an unprofitable subsidiary-40c5 3 consolidating an unprofitable subsidiary-9

[IFRS 10: B88] The parent and subsidiaries are required to have the same reporting dates, or consolidation based on additional financial information prepared by subsidiary, unless impracticable.

One thought on “c5 3 consolidating an unprofitable subsidiary”