Sir,
The question is - On what basis may a subsidiary be excluded from consolidation?
I answered - The subsidiary was acquired with the intention of reselling it after a short period of time.
According to the answers it is wrong.
Why? I even checked the notes - 2 grounds to exclude from consolidation are - 1) materiality 2) the subsidiary might be held for resale
Thank you in advance!
Ask the Tutor ACCA FR
N 89 BPP Revision KIT
Hi,
I'll update the notes slightly as they are leading to your confusion, sorry. If the subsidiary is acquired to be sold within 12 months then it is still consolidated but done so using the rules of IFRS 5 and shown as a separate line item.
Subsidiaries are no longer consolidated once the parent loses control, so effectively there is now no basis on whihc a subsidiary may be excluded from consolidation.
Thanks
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