Skip to content

CA Final · Financial Reporting · Consolidated Financial Statements

Veda Industries Ltd. is a parent that prepares consolidated financial statements. Which description best matches how Ind AS 110 defines consolidated financial statements?

Consolidated financial statements present the assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries as if they were those of a single economic entity. They are not separate statements, and cash flows are included along with the other elements.

  1. AFinancial statements of a group in which the assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries are presented as those of a single economic entityCorrect
  2. BFinancial statements in which only the parent's assets and liabilities are shown, with investments in subsidiaries carried at cost
  3. CFinancial statements that add the subsidiaries' profits to the parent's profit but exclude subsidiaries' cash flows
  4. DFinancial statements prepared separately by each subsidiary and then filed together with the parent's accounts

Explanation

Ind AS 110 defines consolidated financial statements as those of a group in which assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries are presented as those of a single economic entity. The option excluding cash flows is wrong because cash flows are expressly included. The cost-based option describes separate financial statements, not consolidated ones.

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