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CA Final · Financial Reporting · Consolidated Financial Statements

Ganga Ltd consolidates its subsidiary Yamuna Ltd, which has a reporting date of 30 November, whereas Ganga reports at 31 March. Ganga is evaluating its position under Ind AS 110. Which statement is correct?

The four-month gap between 30 November and 31 March exceeds the three-month maximum, so Yamuna's financial information must be prepared as at 31 March for consolidation. Disclosure or consistency across periods cannot cure a gap longer than three months.

  1. AThe three-month limit is exceeded, so Yamuna's statements must be prepared as at 31 March for consolidationCorrect
  2. BA four-month gap is allowed if disclosed
  3. CThe gap is acceptable only if Yamuna is not wholly owned
  4. DThe gap may be any length provided the periods are consistent year to year

Explanation

The difference between the subsidiary's and the consolidated reporting dates must be no more than three months. 30 November to 31 March is four months, so the limit is breached. Consistency across periods is also required, but it does not remove the three-month cap.

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