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If A(parent) owned 60% of B and 10% of C while B owned 30% of C, do we console the C’s account with A when we are preparing consolidation financial statement?
Well, there’s a toughie! First, let me reassure you that I don’t ever remember a similar situation in an ACCA exam!
Now, clearly C is an associate. It’s either a 28% associate of A or it’s a 30% associate of B which would then be further consolidated with A.
IF ( and it’s a big IF ) it should come up in an exam, I think I would be inclined to bring it straight into the consolidation as a 28% interest by A.
Of course, that’s always assuming that we don’t have any effective control as under IFRS 10.
But …. it’s not going to come up!
probably
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