2
Method of preparing a consolidated statement of financial position
(a)
Restate the assets and liabilities of the subsidiary at its fair value.
(b)
Parent's investment in the subsidiary and the parent's portion of net assets of the subsidiary are
eliminated against each other.
(c)
Non-Controlling Interest (NCI) in the net assets of consolidated subsidiaries should be presented
separately under the equity in the consolidated statement of financial position
(d)
Goodwill on consolidation should be dealt in accordance with
SLFRS 3- Business Combinations
(e)
Intra group transactions must be accounted for:
SLFRS 10- Consolidated Financial Statements
states that all intragroup balances and transactions, and resulting unrealized profits, should be
eliminated in full.
Fair value of Net assets acquired
SLFRS 3
requires that the subsidiary’s assets and liabilities are recorded at their fair value at the date of
acquisition and production of consolidated accounts. Adjustments will therefore be required where the
subsidiary’s accounts themselves do not reflect fair value.
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