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CMA Final · Corporate Financial Reporting · Consolidated Financial Statements and Separate Financial Statements

Under Ind AS 110, consolidated financial statements are best described as the financial statements of a group in which:

Consolidated financial statements present the assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries as those of a single economic entity. Leaving out items, or carrying subsidiaries as cost investments, describes something else, not consolidation under Ind AS 110.

  1. AOnly the assets and liabilities of the parent and its subsidiaries are added, with income and expenses left out
  2. BThe assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries are presented as those of a single economic entityCorrect
  3. CThe parent's financial statements are shown with subsidiaries carried as investments at cost
  4. DEach subsidiary's statements are presented separately and attached to the parent's statements

Explanation

Ind AS 110 defines consolidated financial statements as those of a group in which the assets, liabilities, equity, income, expenses and cash flows of parent and subsidiaries are presented as those of a single economic entity. Option 0 omits income, expenses, equity and cash flows. Option 2 describes separate financial statements, not consolidation.

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