Consolidation and Equity accounting

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Asnake E
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Joined: 02 Oct 2019, 03:28

Consolidation and Equity accounting

Post by Asnake E »

Hi

Are there any exemptions for the parent (adopting IFRS) from consolidating a subsidiary and equity accounting an associate based on the reason that the subsidiary and the associate have not adopted IFRS in their financial statements?
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Marek Muc
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Re: Consolidation and Equity accounting

Post by Marek Muc »

No, and it wouldn't make any sense if you think about it

Adjust for major differences between local GAAP and IFRS, ignore immaterial ones, and proceed with consolidation
Asnake E
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Joined: 02 Oct 2019, 03:28

Re: Consolidation and Equity accounting

Post by Asnake E »

I know it wouldn’t make any sense.
Thank you.
JRSB
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Re: Consolidation and Equity accounting

Post by JRSB »

I read the other day that UK company law permits a group to exclude subsidiaries if there is undue difficulty or delay in obtaining the information.

But it's not permitted under IFRS or UK GAAP, so in practice it's impossible to apply!
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Marek Muc
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Re: Consolidation and Equity accounting

Post by Marek Muc »

Are there any entities in UK that are in the scope of UK company law, but use neither IFRS nor UK GAAP?
JRSB
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Re: Consolidation and Equity accounting

Post by JRSB »

Not that I can think of. Companies generally apply IFRS or FRS 102. FRS 102 is adapted from IFRS for SMEs. But there's also FRS 101 (but that applies IFRS principles) and FRS 105 (for micro entities that don't consolidate anyway).
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