When to consolidate

In this lesson

1. 0:00 When to consolidate financial statements
2. 0:34 Exemptions from presenting consolidated statements
3. 1:23 Invalid reasons for excluding subsidiaries
4. 2:48 Investment entity exception explained

About this lesson

permitted under IFRS standards. The video covers the fundamental rule: if an entity controls one or more other entities, consolidated financial statements must be prepared using uniform accounting policies across the group. You'll explore the specific exemptions available—such as when you're a non-publicly traded subsidiary whose parent already produces consolidated statements—and learn how to apply these criteria in practice. A key focus is distinguishing between invalid reasons for excluding subsidiaries and the rare circumstances where non-consolidation is actually permitted. The lesson explains why factors like different business nature, operational restrictions, or poor financial performance don't justify exclusion, and clarifies that only investment entities measuring subsidiaries at fair value through profit or loss have a genuine alternative to consolidation. This content is essential for SBR and F2 papers, where understanding consolidation scope and exceptions directly impacts your ability to prepare and interpret group financial statements correctly.

Duration: 3m