Accounting & Finance
Management Accounting
Group Accounts and Consolidated Statements of Financial Position
Objectives
1. Describe the concept of a group as a single economic unit
2. Examine consolidated procedures under IFRS 10
3. Prepare a consolidated statement of financial position for a single group,
consisting of a parent and one subsidiary
Group Accounts
What is a Group?
Essentially, the basic feature of a group is that one company (the parent company)
controls all the others within the group (the subsidiaries).
Each company in the group will prepare its own individual company accounts.
However, if a group exists, the parent company must prepare consolidated accounts on
the assumption that all transactions of the group were carried out by a single equivalent
company.
Accounting Standards Dealing with Group Accounts
There are four accounting standards which deal with group accounts, as below:
1. IFRS 10 Consolidated Financial Statements
2. IAS 27 (revised) Separate Financial Statements
3. IFRS 3 Business Combinations
4. IAS 28 Investments in Associates
Basic Related Definitions
The following definitions apply under IFRS 10:
Group – a parent organisation and its subsidiaries
Parent – an entity that has one or more subsidiaries
Subsidiary – an entity that is controlled by another entity
Management Accounting
Group Accounts and Consolidated Statements of Financial Position
Objectives
1. Describe the concept of a group as a single economic unit
2. Examine consolidated procedures under IFRS 10
3. Prepare a consolidated statement of financial position for a single group,
consisting of a parent and one subsidiary
Group Accounts
What is a Group?
Essentially, the basic feature of a group is that one company (the parent company)
controls all the others within the group (the subsidiaries).
Each company in the group will prepare its own individual company accounts.
However, if a group exists, the parent company must prepare consolidated accounts on
the assumption that all transactions of the group were carried out by a single equivalent
company.
Accounting Standards Dealing with Group Accounts
There are four accounting standards which deal with group accounts, as below:
1. IFRS 10 Consolidated Financial Statements
2. IAS 27 (revised) Separate Financial Statements
3. IFRS 3 Business Combinations
4. IAS 28 Investments in Associates
Basic Related Definitions
The following definitions apply under IFRS 10:
Group – a parent organisation and its subsidiaries
Parent – an entity that has one or more subsidiaries
Subsidiary – an entity that is controlled by another entity
