Excluding a subsidiary and principles of consolidation
In this lesson, you'll learn when and how subsidiaries can be excluded from consolidation, and understand the key principles that govern how consolidated financial statements are prepared.
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In this lesson
- 0:01 Excluding subsidiaries from consolidation
- 1:14 Permitted grounds for exclusion
- 2:20 Materiality and regular review requirements
- 3:24 Principles of consolidation alignment
- 4:29 Non-coterminous year ends explained
- 5:49 Identifying control in group structures
About this lesson
You'll discover that while poor performance or different business activities alone don't justify exclusion, subsidiaries held for sale or those that are immaterial can be excluded under specific IFRS rules. You'll also explore how parent companies must adjust subsidiary figures to align with group accounting policies, handle non-coterminous year ends, and most importantly, how to identify whether a parent actually has control over a subsidiary — which determines consolidation requirements in the first place. This is essential knowledge for SBR and FR papers, where consolidation questions frequently test your understanding of control and the practical mechanics of group accounting.
Duration: 9m
Transcript
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