In these consolidated financial statements, the assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries are aggregated and presented as one set of accounts, as if they have become one single company. it has ownership interests in the form of equity or similar interests. Identify the investee. *, combine like items of assets, liabilities, equity, income, expenses and cash flows of the parent with those of its subsidiaries, offset (eliminate) the carrying amount of the parent's investment in each subsidiary and the parent's portion of equity of each subsidiary (. Instead, IFRS 12 Disclosure of Interests in Other Entities outlines the disclosures required. After reviewing the basic concepts of consolidation, you will go through the three basic steps of consolidation using practical examples and interim tests to enhance understanding. Upon receipt of the increased capacity notification, registration will be on a first-come, first-served basis. the date on … An entity is required to consider all facts and circumstances when assessing whether it is an investment entity, including its purpose and design. MFRS 10 effective 1 January 2013. OverviewThe main objective of consolidated financial statements is to help the users of financial statements make informed economic decisions. [IFRS 10:B94, IFRS 10:B89], The reporting entity also attributes total comprehensive income to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. The proportion allocated to the parent and non-controlling interests are determined on the basis of present ownership interests. Early application is permitted. Power arises from rights. NCI constitutes existing interest in a subsidiary not attributable, directly or indirectly, to a parent. Please read, International Financial Reporting Standards, Post-implementation review — IFRS 10, IFRS 11, and IFRS 12, IASB issues new standard on consolidation, IFRS 10/IAS 28 — Sales or contributions of assets between an investor and its associate/joint venture, IFRS 10/IAS 28 — Investment entity amendments, IASB publishes request for information on the post-implementation review of IFRS 10-12, We comment on the tentative agenda decision on sale and leaseback in a corporate wrapper, ESMA publishes 24th enforcement decisions report, ESMA publishes 23rd enforcement decisions report, ESMA publishes 22nd enforcement decisions report, ESMA publishes 21st enforcement decisions report, IFRS in Focus — IASB seeks information on its post-implementation review of IFRS 10, IFRS 11 and IFRS 12, Deloitte comment letter on the tentative agenda decision on sale and leaseback in a corporate wrapper, Deloitte comment letter on tentative agenda decision on IFRS 10 — Investment entities and subsidiaries, EFRAG endorsement status report 23 September 2016, IFRIC 17 — Distributions of Non-cash Assets to Owners, Conceptual Framework Phase D — Reporting entity, IAS 32 — Put options over non-controlling interests (NCIs), Project on consolidation added to the IASB's agenda (, Effective for annual periods beginning on or after 1 January 2013, Effective for annual periods beginning on or after 1 January 2014, requires a parent entity (an entity that controls one or more other entities) to present consolidated financial statements, defines the principle of control, and establishes control as the basis for consolidation, set out how to apply the principle of control to identify whether an investor controls an investee and therefore must consolidate the investee, sets out the accounting requirements for the preparation of consolidated financial statements. In order to prepare consolidated financial statements, IFRS 10 prescribes the following consolidation procedures: Combine like items of assets, liabilities, equity, income, expenses and cash flows of the parent with those of its subsidiaries; Offset (eliminate): The carrying amount of the parent’s investment in each subsidiary; and POTENTIAL VOTING RIGHTS Share options (calls), warrants or other similar instruments that can be converted into ordinary shares of another entity. Articles related to IFRS 10 5 | IIFRS 10 Consolidated Financial Statements Circumstances when voting rights or similar rights give an investor power IFRS 10 envisages a number of different ways in which an entity can have power over another entity. Paragraph 4 of IFRS 10 provides relief whereby a parent need not present consolidated financial statements if it meets particular conditions, including the requirement that “its ultimate or any intermediate parent produces consolidated financial statements that are available for public use and comply with IFRSs.” IFRS 10 Consolidated Financial Statements outlines the requirements for the preparation and presentation of consolidated financial statements, requiring entities to consolidate entities it controls. ], IFRS 10 contains special accounting requirements for investment entities. [IFRS 10:4B], Consolidated financial statements: [IFRS 10:B86], A reporting entity includes the income and expenses of a subsidiary in the consolidated financial statements from the date it gains control until the date when the reporting entity ceases to control the subsidiary. Control requires exposure or rights to variable returns and the ability to affect those returns through power over an investee. 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