Skip to content

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

Under the consolidation procedures in Ind AS 110, how is the parent's investment in a subsidiary dealt with when preparing consolidated financial statements?

The carrying amount of the parent's investment is offset (eliminated) against the parent's portion of the subsidiary's equity, with any related goodwill accounted for under Ind AS 103. It is not retained as an asset, and it is not offset against the non-controlling interest's portion of equity.

  1. AIt is offset against the parent's portion of equity of the subsidiary, with any related goodwill accounted for under Ind AS 103Correct
  2. BIt is retained as an asset and the subsidiary's equity is shown as a separate reserve
  3. CIt is offset against the subsidiary's total equity, including the non-controlling interest's portion
  4. DIt is measured at fair value and presented as a financial asset in consolidated statements

Explanation

Appendix B requires the carrying amount of the parent's investment in each subsidiary to be offset against the parent's portion of equity of the subsidiary. Goodwill is dealt with under Ind AS 103. Offsetting against total equity would wrongly remove the non-controlling interest's portion.

Did you get it right without looking?

One question tells you little. A timed set on Ind AS 110 Consolidation Procedure for Subsidiaries shows your real accuracy, how long you take and where you lose marks.

Practise Ind AS 110 Consolidation Procedure for SubsidiariesFree diagnostic mock

More Ind AS 110 Consolidation Procedure for Subsidiaries questions