CA Final · Financial Reporting · Ind AS 110 Consolidation Procedure for Subsidiaries

Sundaram Holdings Ltd is a parent that has three wholly owned subsidiaries. Its management wants to prepare consolidated financial statements. Which of the following correctly describes the consolidation procedures for combining the financial statements of the parent and its subsidiaries under Ind AS 110?

Consolidation combines like items of assets, liabilities, equity, income, expenses and cash flows of parent and subsidiaries line by line. The parent's investment is offset against its share of subsidiary equity, and intragroup assets, liabilities, income, expenses and cash flows are eliminated in full.

1. ACombine like items of assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries line by line, then eliminate the parent's investment against its portion of subsidiary equity and eliminate intragroup balances and transactionsCorrect
2. BPresent the parent's statements and the subsidiaries' statements side by side without combining any line items, and disclose the intragroup balances in the notes
3. CCombine only the assets and liabilities of the subsidiaries and leave out their income, expenses and cash flows
4. DCombine the items line by line but eliminate intragroup profits only to the extent of the parent's ownership percentage