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Consolidation

2 April 2010 1,495 views 4 Comments

1. Does IFRS require consolidated accounts to be reported for subsidiary companies pursuing dissimilar activities?

2. Do companies within the EU have to use IFRS as a standard?  Are other standards allowed?

3. It is common practice, according to a publication, that consolidated accounts are prepared from the point of view of the parent company, thus, separating the fair values of minority interests.  Is this practice being worked upon by IASB?

If possible, please quote the relevant standard and the location of the source copy.

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4 Comments »

  • ifrslist
    ifrslist said:

    [New Post] Consolidation – http://www.ifrslist.com/2010/04/consolid...
    via Twitoaster

    # 2 April 2010 at 12:37 pm
  • IFRS List.com: Consolidation — Accounting Blog (author) said:

    [...] admin wrote an interesting post today. Here’s a quick excerptWelcome to IFRSLIST.com, the free community where you can find resources, share experience, knowledge and ideas about IFRS, bAccounting/b and Auditing with more than 1.5k members. Sign-up and start a new discussion. … [...]

    # 2 April 2010 at 2:16 pm
  • Valuable Internet Information » IFRS List.com: Consolidation (author) said:

    [...] See the rest here: IFRS List.com: Consolidation [...]

    # 2 April 2010 at 2:25 pm
  • patriciawalters said:

    First, from your questions, including the one on share capital and consolidations that Mladek addressed, tell me that you don’t understand the process of consolidation. Our simply quoting various IFRSs standards and paragraphs are just giving you bits and pieces. My suggestion would be to get a basic accounting text to better understand the accounting model and then come back with questions. Having a copy of the standards, IAS 27 covers consolidation, and having read the standard first, is also appropriate. Otherwise, your questions are not really IFRS questions, but questions about the basics of accounting.

    The process of consolidation treats a group of companies under the control of a parent company as a single economic entity. Therefore, when the companies financial statements are consolidated, the proportion of the share capital accounts of the subsidiaries are eliminated and the proportion of the share capital accounts of subsidiaries that are less than 100% owned (but still controlled) by the parent are recognized as minority or non-controlling interest. Consolidation of a subsidiary that is less than 100% owned by the parent company always results in recognition of a noncontrolling interest. There are no exceptions in IFRS to the principle of consolidating controlled entities, regardless of the activities in which they engage.

    How one should do elimination entries, etc, to do the consolidation is not discussed in IAS 27. There are lots of advanced accounting texts that can help you understand that process.

    Regards
    Patricia Walters

    # 23 August 2010 at 2:25 pm

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