The objective of IFRS 10 is to establish principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities.[IFRS 10:1] The Standard: [IFRS 10:1] An investor controls an investee when the investor is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee * Added by Investment Entities amendments, effective 1 January 2014.For instance if company Z owns company A, B and C, then the consolidating financial statements will show the details of company A, company B and Company C, whereas Consolidated financial statements will just show the total of A B and C.ransactions where subsidiary entities bought and sold goods or loaned each other money.For example lets say we have Parent company P and subsidiary companies S and T. S would record revenue of ,000 and T would record expense of ,000.For example, let's assume that Northern Electric Power (NEP) is an electric utility with its stock traded on a stock exchange.NEP acquires all of the stock of Midwest Gas Corporation (MGC). NEP is the parent company and MGC is the subsidiary company.Please read our cookie notice for more information on the cookies we use and how to delete or block them.The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected.
For instance if company Z owns company A, B and C, then the consolidating financial statements will show the details of company A, company B and Company C, whereas Consolidated financial statements will just show the total of A B and C.
It will also report all of the liabilities of the economic entity.
(Amounts owed and receivable between NEP and MGC are eliminated in the consolidated balance sheet.) This is a very brief overview of consolidated financial statements.
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IFRS 10 Consolidated Financial Statements outlines the requirements for the preparation and presentation of consolidated financial statements, requiring entities to consolidate entities it controls.