Consolidation According to IAS 27: Consolidated Financial Statements

1. A subsidiary is defined as a company controlled by another enterprise.

1. If a parent has one or more subsidiaries, consolidated financial statements are required.

1. Intermediate parents are generally exempt from preparing consolidated financial statements

1. All subsidiaries must be included, unless control is temporary or if there are severe long-term restrictions on the transfer of funds from the subsidiary to the parent.

1. The difference between reporting dates of consolidated subsidiaries should be no more than three months from the parent’s.

1. Uniform accounting policies should be followed for the parent and its subsidiaries or, if this is not practicable, the enterprise must disclose that fact and the proportion of items in the consolidated financial statements to which different policies have been applied.

1. In the parent’s separate financial statements, subsidiaries may be shown at cost, at revalued amounts, or using the equity method.