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What should be the consolidation treatment for an associate of the parent which is also an associate of Parent’s subsidiary. That means the the Associate is associate for both parent and subsidiary.
Can you tell me the treatment and adjustment required in consolidation statement. s
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you need to follow IFRS 10 and 12 and watch the defination of the word control, If the company has a shareholding by two or more members of a group you need yo examine the cumulative effect on this. Th combination of the parents shareholding with that of the sudsidiary might be enough to secure control and thsi it might not be an associate, it might in fact be a subsidiary.
In any case look at what group you are doing the accounst for eg who is teh parent and whatever relationship exists in the group is what you treat as eg parent, subsidiary, associate and or invetsment or joint venture.Hi Madina ( and thanks Patrick )
If the parent has, say, 30% and the subsidiary has 25%, then the parent controls 55% of the third company’s shares and votes – there’s no question, it’s a subsidiary. “Where we own greater than 50% either alone or through others….”
If we own 25% and the subsidiary owns, say, 20% then the problem is a little more complicated. The 45% which we control does not give us control under the pre-IFRS 10 definition. However, following the issue of IFRS 10, we could be claimed to have effective control, dependent upon the disposition of the remaining 55%.
Equally, if the remaining 55% is owned by one share-holder then we have no influence and would treat the investment as just that – an investment
OK?
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