IFRS 10

Consolidated Financial
Statements
By:
Damtew
Mengesha(ACCA,DipIFRS)
 Overview
 OBJECTIVE
 SCOPE
 PRINCIPLES OF CONSOLIDATION
 DISCLOSURES
 OBJECTIVE

• To establish principles for the presentation and

preparation of consolidated financial statements
when an entity controls one or more other entities.
 SCOPE

• Exceptions from Consolidation.

1. A subsidiary of an another entity.
2. Equity or debt not traded in a public market
3. Its financial statements not filed with security
commission or in the process of filing with them
4. Its ultimate parent prepares the FS.
• Post employment benefit plans
• Investment entity
 Principles of Consolidation
(a) combine like items of assets, liabilities, equity,
income, expenses and cash flows of the parent with
those of its subsidiaries.
(b) offset (eliminate) the carrying amount of the
parent’s investment in each subsidiary and the
parent’s portion of equity of each subsidiary.
(c) Eliminate intragroup transactions in full.
 Principles of Consolidation
• Uniform accounting policies
 Accounting policies should be uniform. Otherwise
adjustments required.
 The income and expenses of subsidiaries should be
included in the consolidated FS from the date of
control until it losses control.
 Principles of Consolidation
• Reporting date
 All the group members should use the same
reporting date; otherwise adjustments required.
• Non Controlling interest
 Profit or loss and other comprehensive incomes of
the consolidated statements should be attributed to
the owners of the parents and non controlling
interest.
• Loss of control
 If a parent losses control of a subsidiary
 Principles of Consolidation
• Loss of control
 If a parent losses control of a subsidiary, then the
parent shall derecognise:
(a) The assets (including the goodwill) and liabilities of
the subsidiaries at their carrying amounts at the
date when control is lost.
(b) The carrying amount of any non controlling
interest in the former subsidiary at the date when
the control is lost.
 DISCLOSURES
• IFRS 12 is about disclosures in IFRS 10,IAS 28,IFRS11

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