group accounts

Question 1

what is a group ?

Answer 1

when a co owns more than 50% shares of another co.
-it gets control
-voting rights to appoint all directors
-can treat like a dept
-distinct for legal purposes but in economic substance they can be considered a group

Question 2

define parent

Answer 2

an entity that controls one or more entities.

Question 3

define subsidary

Answer 3

an entity that is controlled by another entity

Question 4

according to ias 10 when is a group required to prepare consolidated FS?

Answer 4

when a parent has control of the subsidary (50% voting rights)

Question 5

what are the 3 elements of control according to IAS 10?

Answer 5

1- power over the investee
2- exposure or rights, to variable returns from its involvement with the investee
3- the ability to use its power over the investee to affect the amount of the investor’s returns.

Question 6

what is the exception of preparing group fs?

Answer 6

a parent doesnt have to present consolidated FS if:
1- the parents debt or equity instruments are not traded in a public market
2- the parent itself is a wholly or partially owned subsidary and it’s owners have been informed and dont object to it
3-the parent did not file its FS with a securities commission or other organisation for the purpose of issuing any instruments in public.
4-the ultimate parent company produces consolidated FS that comply with IFRS standards and are available for public use

Question 7

what is the requirement of IAS 27 separate financial statements?

Answer 7

following disclosures are required to be made:
1) the fact that consolidated financial statements have not been presented
2) a list of significant investments (subsidaries etc) including % shareholding, main place of business and country
3- the basis on which those investments listed above have been accounted for in its separate fs