Group
A group consists of a parent and its subsidiaries. The individual companies remain separate legal entities, but consolidated financial statements present their financial activities as those of a single economic entity. Control determines membership, not simply the existence of a commercial relationship. An associate is an investment reported by the equity method rather than a subsidiary consolidated line by line.
Worked example
P controls S and T: the group includes P, S and T, with balances and transactions between them eliminated on consolidation.
Common mistake
A shared director, major customer relationship or minority investment does not on its own create a parent-subsidiary group.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | FR | Direct | Official assessment-window verification pending |
| ACCA | K1 | Direct | July 2027–August 2028 |
| CIMA | F2 | Direct | Official assessment-window verification pending |
| FIA | FFA | Direct | September 2026–June 2027 |