Skip to content

CA Final · Financial Reporting · Consolidated Financial Statements

Sagar Ltd has subsidiaries Alfa Ltd (year-end 31 March), Beta Ltd (year-end 31 December) and Gamma Ltd (year-end 30 September). Sagar's year-end is 31 March. Aligning dates is impracticable for Beta and Gamma. For which approach is Ind AS 110 consistent?

Beta can be consolidated using its 31 December statements adjusted for significant events, since the gap is three months. Gamma's 30 September date gives a six-month gap, exceeding the three-month limit in Ind AS 110, so its statements cannot be used as they stand.

  1. AConsolidate Beta using 31 December statements, adjusted for significant events; Gamma cannot be consolidated using 30 September statements as the gap is six monthsCorrect
  2. BConsolidate both Beta and Gamma using their own dates, adjusted for significant events
  3. CConsolidate Gamma using 30 September statements because it is the most recent, with disclosure of the gap
  4. DExclude both Beta and Gamma from consolidation as their dates differ

Explanation

Beta's gap is three months, which is the permitted maximum, so adjusted statements can be used. Gamma's gap is six months, which exceeds three months, so its 30 September statements cannot be used; additional statements as at the parent's date would be needed. Disclosure does not cure a gap beyond the limit.

Did you get it right without looking?

One question tells you little. A timed set on Consolidated Financial Statements shows your real accuracy, how long you take and where you lose marks.

Practise Consolidated Financial StatementsFree diagnostic mock

More Consolidated Financial Statements questions