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If subsidiary has an year end of March and Parent has an year end of June , while doing consolidation do we do line by line consolidation ?
I understand we will make an additional sheet about significant events and transactions of subsidary from March end to June end ?
I cant get a clarity on consolidation adjustment
According to IFRS 10:
1. S must prepare, for consolidation purposes, additional financial information as at the reporting date of the parent “unless impracticable to do so”.
Or
2. If impracticable, P consolidates S’s financial statements adjusted for the effects of significant transactions/events between the dates.In either case, the consolidation is a “standard” 100% line-by-line of S which already takes account of the difference between the reporting dates.
So ideally i consolidate it by parents year end of course ie, March and how do i account for the 1 month difference in subsidiaries amounts ?
if PPE of S is 100000
and that of parent is 200000
consolidated would show 300000 or should i do some adjustment for that 1 month gap ?In your first post you say P’s y/e is June and S’s is March – so 3 months difference (which is the maximum allowed under IFRS 10).
If at 31/3/19 S has PPE 100,000 – the movement to 30/6/19 might be only depreciation – or their could be additions or disposals. According to 1. in my post above, S would provide an amount for PPE as at 30/6/19 for the purposes of consolidation (it could extract a trial balance at this date and make period-end adjustments for depreciation, etc). According to 2. – P would consolidate 100,000 after adjustment for only significant transactions – so a major addition or disposal might be taken into account, but depreciation might be ignored.
Thank you Kim
That does make sense now. My thought was that additional info would be a different sheet of list of significant transaction .So ideally when there is a non coterminous year end, we do consolidate but we make adjustments in the subsidiary amounts for all the significant things happened btw year ends of P and S.
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