21. Consolidated Financial Statement of Financial Position

Question 1

Which IFRS is responsible for consolidated statements of financial position?

What does it state about power? (3)

Answer 1

IFRS 10 Consolidated Financial Statements

• power over the investee (voting rights)
• returns for involvement (dividends)
• use power to effect returns received

Question 2

What are the 5 things you need to work out for a consolidated SOFP?

How do you work them out?

Answer 2

1. Diagram for work structure:

Parent — Subsidiary: date of acquisition and % of holding

2. Net asset turnover

Share capital, share premium, retained earnings and revaluation surplus at acquisition date and at reporting date. (NOTE: share values should be the same).

3. Goodwill

Fair value paid for holding
Fair value of NCI at acquisition
- Fair value of net assets at acquisition (W2)

4. Non controlling interest

FV of NCI at acquisition
NCI share of post acquisition reserves

5. Group retained earnings

100% P RE
parents % of S RE.