F1 6 Group accounts

In this section…

In this section we shall explain what is meant by a group of companies, parent company and subsidiary companies. We will then look at the reporting requirements of parent companies and how the following consolidated financial statements are prepared.

  • The consolidated statement of profit or loss and other comprehensive income
  • The consolidated statement of financial position

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6.01 IFRS 3 Business combinations
  • Businesses and business combinations
  • The acquisition method

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6.02 IFRS 10 Consolidated financial statements
  • Groups of companies
  • Requirement to prepare consolidated financial statements
  • Control
  • Consolidation process

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6.03 Calculating goodwill
  • Calculation
  • Fair values
  • Majority shareholdings
  • Bargain purchases

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6.04 The consolidated statement of profit or loss part 1: the general approach
  • Treating the group as a single entity

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6.05 The consolidated statement of profit or loss part 2: intragroup trading
  • Elimination of the effects of intragroup trading
  • Sales and purchases between group members
  • Inventories acquired from group members
    • Unrealised profits

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6.06 The consolidated statement of profit or loss part 3: intragroup interest and dividends
  • Elimination of intragroup interest received and paid
  • Elimination of intragroup dividends received

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6.07 The consolidated statement of profit or loss part 4: non-controlling interests
  • Non-controlling interests
  • Apportioning profit for the year
    • Profit attributable to non-controlling interests
    • Profit attributable to the equity holders of the parent company

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6.08 The consolidated statement of profit or loss and other comprehensive income
  • Gains and losses on revaluation
  • Attributing gains and losses

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6.09 The consolidated statement of financial position: part 1
  • The general approach to calculating consolidated assets and liabilities
  • The general approach to calculating equity

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6.10 The consolidated statement of financial position: part 2
  • Adjusting for intragroup balances
  • Adjusting for unrealised profits in inventories
  • Non-controlling interests

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6.11 The consolidated statement of financial position: part 3
  • Differences between the fair and carrying values of assets and liabilities at the date of acquisition
  • Goodwill impairments
  • Intragroup loans and debentures

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6.12 The consolidated statement of financial position: part 4
  • Treatment of bargain purchases
  • Other reserves including revaluation reserves

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