- This topic has 1 reply, 2 voices, and was last updated 6 years ago by
.
- Posts
Hi,
Group consolidation will be done with parent and subsidiary companies’ financial statements but what happens if subsidiary companies use local accounting standards and they confront issues because the parent company uses IFRS ?
what do they do if they confront this kind of issues ?
By definition, a parent controls a subsidiary, so the management of the parent must be able to instruct the management of the subsidiary to provide all information necessary for the consolidated financial statements to be prepared in accordance with IFRS. This does NOT mean that the subsidiary will have to prepare two completely different sets of financial statements (one to file locally under a different financial reporting framework and one for consolidation). Rather, the parent will send to all subsidiaries a “consolidation pack” or “pro forma statements” for completion. This will put all relevant financial information for the subsidiaries into a standard format to facilitate the consolidation.
- You must be logged in to reply to this topic.