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ACCA Strategic Professional · Strategic Business Reporting (International) · Other reporting issues

Elm Ltd is 70% owned by Fir plc, which is itself wholly owned by Gorse Holdings. Fir plc and Elm Ltd both prepare IFRS financial statements. In Elm's financial statements, which disclosure is required about the group relationships?

Elm must disclose its parent, Fir plc, and its ultimate controlling party, here Gorse Holdings or its controller. IAS 24 requires this relationship disclosure whether or not any transactions took place, because control relationships are relevant to users even without transactions.

  1. AThe name of Elm's parent and ultimate controlling party, regardless of whether transactions occurredCorrect
  2. BNo disclosure unless transactions took place during the year
  3. COnly the name of the ultimate controlling party, and only if different from Fir plc's shareholders
  4. DThe names of all non-controlling shareholders in Elm

Explanation

IAS 24 requires disclosure of parent–subsidiary relationships irrespective of whether any transactions occurred. Elm must disclose the name of its parent (Fir plc) and its ultimate controlling party (Gorse Holdings, or whoever controls it). Non-controlling shareholders are not listed merely as such.

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