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Discuss critically the Conditions for a parent entity to be exempt from consolidation [IFRS 10.4].

Discuss critically the Conditions for a parent entity to be exempt from consolidation [IFRS 10.4].

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Answer #1

Under IFRS,

A Parent Company is allowed to exclude a Subsidiary Company from consolidation if all the three conditons are met:

  • It is wholly or partially owned and its other owners do not object to non consolidation.
  • It does not have any debt or equity instrument publially traded
  • Its parent prepares consolidated F/S that comply with IFRS

Feel free to ask for any clarification, if required. Kindly provide feedback by thumbs up. It would be highly appreciated. Thank You.

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