Uniform accounting policies
The parent adjusts a subsidiary’s financial information for consolidation if its policies differ from the group’s policies for similar transactions. This makes the combined amounts comparable. Uniform policies do not mean identical estimates when circumstances differ, and they do not automatically require changes to the subsidiary’s own statutory financial statements.
Worked example
A parent measures a class of equipment at cost; a subsidiary uses a revaluation model for similar equipment. The consolidation adjusts the subsidiary’s figures to the group policy, with any associated tax effects considered.
Common mistake
Combining incompatible subsidiary figures without adjustment, or assuming the same useful life must be used for every asset regardless of circumstances.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FR | Direct | September 2026–June 2027 |
| ACCA | SBR | Supporting | September 2026–June 2027 |