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

Under Ind AS 110, consolidated financial statements are described as the financial statements of a group in which the assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries are presented in a particular way. Which presentation is that?

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. They do not show the parent alone with investments, which is the separate-statements approach.

  1. AAs those of a single economic entityCorrect
  2. BAs separate statements of each entity, placed side by side
  3. CAs those of the parent alone, with subsidiaries shown as investments
  4. DAs those of the majority shareholders of the parent

Explanation

The definition in Ind AS 110 (Appendix A) says the assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries are presented as those of a single economic entity. Showing the parent alone with investments describes separate financial statements, not consolidated ones.

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