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Consolidation of financial statements


Never Give up... (student)     16 September 2020

Never Give up...
student 
 1 likes  48 points

| My Other Post

Hi,

 

If a single shareholder (natural person) has 2 different company (100% share in each company) and company has no link with each other except common shareholder.
does company 1 accounts need to be consolidated with company 2 as per IFRS. 

avater

yasaswi gomes   16 September 2020

yasaswi gomes

 106 likes  1844 points

View Profile | My Other Post

Here, in consolidation, the financial statements are prepared between a parent company and a subsidiary. The owner having a share or not is irrelevant because the owner is separate and entity is separate- business entity concept. Based on this, the owner has his returns from company, company has its earnings from customers. So, it can consolidate if a company invested in company 2, but not when a person as an individual invests in company 2.

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