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  1. avatar says

    Mr. Little, can you help with this question?

    Upon consolidation, you would need to have accounting policies of the parent and the subsidiary in line with each other. What would you do if material subsidiary is no longer a going concern. Here, the subsidiary’s Financial Statements would be on a cash basis. So would the reclassification of the subsidiary’s TNCA now go under CA of the group CSoFP?

    • Profile photo of MikeLittle says

      @prateshramjohn, Well, that’s an interesting one! I wonder whether we might sensibly classify the subsidiary as an Asset Held for Sale, value it at fair value as at the date of reclassification and reassess at the year end.

      There is, of course, the other problem that a ( to use your words ) “material subsidiary is no longer a going concern”. Might this not cast some degree of doubt on the ability of the whole group to continue? We would need to ask also why or how the parent has allowed this to happen and what the cause of the problems was.

      I think, instead of thinking about reclassifying the subsidiary’s TNCA, we would rather reclassify the whole subsidiary under IFRS5 at fair value

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