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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?

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. This is the Ind AS 110 definition, and it differs from separate statements that carry subsidiaries as investments.

  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 prepared by a parent showing its investments in subsidiaries at cost
  3. CFinancial statements that add only the profit and loss of a parent and its subsidiaries
  4. DFinancial statements of each subsidiary presented side by side with the parent's

Explanation

Ind AS 110 defines consolidated financial statements as those of a group presenting assets, liabilities, equity, income, expenses and cash flows of parent and subsidiaries as a single economic entity. Cost-based investment presentation is a separate-statement approach. Adding only profits ignores the other elements.

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