- October 6, 2021 at 2:06 pm #637130Noah098Member
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“The auditor should also consider if any further adjustments need to be made to Teapot Co’s net assets to ensure that Group accounting policies have been applied. IFRS 3 requires consistency in accounting policies across Group members, so if the necessary adjustments have not been made, the assets and liabilities will be over or understated on consolidation.”
maam this brings me to a very general doubt, are all subsidiaries supposed to have same accounting policies as the parent? Or that parent co.’s accounting policies differ from subsidiaries but when consolidating the former’s policies are applied across all subsidiaries?October 6, 2021 at 2:27 pm #637134Kim SmithKeymaster
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Please download the SBR notes for reference – see page 14 under “Uniform accounting policies”.
Only if there was some legal/regulatory reason why a particular subsidiary could not adopt the parent’s accounting policies (e.g. if IFRS is not permitted in the subsidiary’s jurisdiction), should it be necessary to make consolidation adjustments for differences in accounting policies.
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