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Let’s take for example a Parent Company owning 100% interest in Company A, which in turn owns 100% interest in Company B. Here, clearly the Parent Company owns indirectly through Subsidiary A 100% of Company B. Hence, clearly the Parent Company should incorporate the operations of Company B in its consolidated financial statements.

Now, let’s take another example. Say, the Parent Company owns 70% interest in Company C, which in turn owns 80% interest in Company D. In this example, Continue reading Consolidation of Indirect Subsidiaries

There are actually two issues here:

1. An argument that the Board merely discouraged the availment of the exception under paragraph 10 of IAS 27 to present consolidated financial statements. The availment should only be made in very rare circumstances, wherein it would ease up the burden of certain companies mandated by their respective applicable law to prepare separate financial statements in addition to the consolidated financial statements.
2. The fact that you append the parent financial statements to the consolidated financial statements does not constitute the parent figures to be that of a separate financial statements. Continue reading Separate Financial Statements – Investment Carried at Cost

Generally accepted accounting principles is defined as a widely accepted set of rules, conventions, standards, and procedures for reporting financial information. It actually encompasses the conventions, rules and procedures to define what is accepted accounting practice.

Generally accepted accounting principles (GAAP) are conventional – that is, they become generally accepted by agreement after tacit agreement rather than by formal derivation from a set of postulates and basic concepts. Continue reading IFRS vs. GAAP