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Sir,
Could you please explain me the terms coterminous and non-coterminous accounting periods?
If parent’s F/S year end is 31st Dec 2013 and Subsidiary’s F/S year end is 31st March 2013, which year end base I would use to prepare group consolidation?
Thank you!
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Dear Suni,
Coterminous means: having same boundaries/ends.
So Coterminous Accounting Period means that Parent Company’s accounting year end is same as Subsidiary’s accounting year end and vice versa for non-coterminous year end.
Difference between the companies for the year end should not be more than 3 months according to IFRS 10. Consolidation is based on the Parent company’s year end, that in your example is 31-12-13.
Therefore GROUP auditor must take care of the appropriate adjustments required to complete the consolidation purposes.
Regards
Suni, ifti is correct in his (unauthorised) response. If you still have an issue with this, please post again and I’ll try to get to your post before Ifti gets there!
Ifti, please restrict your input to the general forum discussions
Thanks
I didn’t understand what Ifti explained. I would need your guidance. My query is here:
Sir,
Could you please explain me the terms coterminous and non-coterminous accounting periods?
If parent’s F/S year end is 31st Dec 2013 and Subsidiary’s F/S year end is 31st March 2013, which year end base I would use to prepare group consolidation?
Thank you!
The parent’s!
It is the statutory duty of the parent company directors to “secure, as far as possible, that the year ends of the subsidiaries and the parent are co-terminus”
So, in your example, the consolidated financial statements will be prepared for the years ended 31 December
In the year of acquisition, the subsidiary should be required by the parent company board to change its year end. English law dictates that a financial period shall not be less than 6 months nor longer than 18 months
In your example, the subsidiary would be required to have a 9 month accounting period ending on 31 December, 2013
Ok?
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