Menu Close

Important Stuff on Ind AS 110, Consolidated Financial Statements

Indian Accounting Standard (Ind AS) 110, Consolidated Financial Statements, Important Material

→ Brief Summary on Ind AS 110

→ Detailed Overview of Ind AS 110

→ Educational Material on Ind AS 110

→ Quick Reference on Ind AS 110

→ Complete Text of Ind AS 110

Ind AS 110 : Consolidated Financial Statements

Standard allows to present financial statements of a parent and its subsidiary as a single economic entity.

Consolidated Statement of profit and loss and consolidated Balance Sheet are prepared for disclosure of the total profit/loss of the group and total assets and liabilities of the group.

The consolidated financial statements (CFS) presents the true and fair view of the position of the entity as one economic entity for the financial year and are considered as the primary financial statements whereas the standalone financial statement projects only the position of the company in its individual performance and does not provide true and fair view to the shareholder about the overall performance of the company with its subsidiaries and associates.

Objectives

The objective of this Indian Accounting Standard (Ind AS) is to establish principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. For the purpose of meeting the above stated objective, this Ind AS:
(a) requires an entity (the parent) that controls one or more other entities (subsidiaries) to present consolidated financial statements;
(b) defines the principle of control, and establishes control as the basis for consolidation;
(c) sets out how to apply the principle of control to identify whether an investor controls an investee and therefore must consolidate the investee;
(d) sets out the accounting requirements for the preparation of consolidated financial statements; and
(e) defines an investment entity and sets out an exception to consolidating particular subsidiaries of an investment entity.

Scopes

An entity that is a parent shall present consolidated financial statements. This Ind AS applies to all entities, except as follows:

(a) A parent need not present consolidated financial statements if it meets all the following conditions:

(i) it is a wholly-owned subsidiary or is a partially-owned subsidiary of another entity and all its other owners, including those not otherwise entitled to vote, have been informed about, and do not object to, the parent not presenting consolidated financial statements;
(ii) its debt or equity instruments are not traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets);
(iii) it did not file, nor is it in the process of filing, its financial statements with a securities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market; and
(iv) its ultimate or any intermediate parent produces consolidated financial statements that are available for public use and comply with Ind ASs.

(b) post-employment benefit plans or other long-term employee benefit plans to which India AS 19, Employee Benefits, applies.

(c) an investment entity need not present consolidated financial statements if it is required, in accordance with paragraph 31 of this Ind AS, to measure all of its subsidiaries at fair value through profit or loss.

Get Important Stuff from CA Blog India Directly in Your Email Inbox:

Follow founder on:

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *

CommentLuv badge