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CA Final · Financial Reporting · Consolidated Financial Statements

Which of the following best describes 'consolidated financial statements' as defined in Ind AS 110, and which element is part of that definition?

Consolidated financial statements are the group's financial statements 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 entity.

  1. AStatements of the parent in which subsidiaries are shown as a single investment line at cost, with only income and expenses combined
  2. BStatements of the group presenting assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries as those of a single economic entityCorrect
  3. CStatements presenting only assets and liabilities of the parent and subsidiaries as those of a single economic entity, excluding cash flows
  4. DStatements of each subsidiary presented separately and aggregated in notes to the parent's financial statements

Explanation

The definition covers assets, liabilities, equity, income, expenses and cash flows of the parent and subsidiaries presented as a single economic entity. The option omitting cash flows is incomplete, and investment-at-cost presentation describes separate financial statements, not consolidated ones.

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