Subsidiary acquired exclusively with a view to disposal
IFRS 5 contains specific requirements when an entity acquires a subsidiary exclusively with a view to subsequent disposal, including assessment of the one-year requirement and other criteria shortly after acquisition. Apply IFRS 3 and IFRS 5 as relevant, and present the disposal group under the required held-for-sale rules. An intention to sell does not remove the obligation to consider control and consolidation.
Worked example
A parent acquires a subsidiary solely for resale and expects a highly probable sale within a year. It assesses the IFRS 5 acquisition-specific conditions and accounts for the subsidiary accordingly, rather than omitting it from the group accounts.
Common mistake
Excluding the subsidiary from the consolidated financial statements merely because it was purchased for resale.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | SBR | Direct | September 2026–June 2027 |