International Financial Reporting Standards (IFRS)

IFRS for Small and Medium-sized Entities (SMEs)
Section 9: Consolidated and Separate Financial Statements

1. Parent entity is required to prepare
--> consolidated financial statements
--> including all subsidiaries

2. Exemptions
(1) Entity A is the parent of Entity B
Entity B is the parent of Entity C
--> Entity B is not required to prepare consolidated financial statements
--> If Entity A prepares consolidated financial statements

(2) Entity D is the parent of Entity E
Entity D acquired Entity E with the intention of selling it within one year
--> Entity D is not required to prepare consolidated financial statements

3. Control is
--> the power to govern policies of another entity

4. Control is presumed
--> if one entity owns
--> more than 50% of voting power
--> of another entity

5. If there are other evidences of control
--> control exits
--> even with 50% or less of voting power

6. If an entity controls SPEs
--> such SPEs are consolidated
SPE: Special Purpose Entity

7. Financial statements of parent and subsidiaries
--> are prepared as of same reporting date
--> Exception: when impracticable

8. Uniform accounting policies are required
--> for consolidated financial statements

9. Non-controlling interest is presented
--> within equity
--> separate from owners of parent

10. (1) and (2) are attributed to (A) and (B)
--> (1) profit or loss
--> (2) each component of other comprehensive income (OCI)
--> (A) non-controlling interest
--> (B) owners of parent

11. Non-controlling interest
--> may have a deficit balance