I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

Consolidated financial statements

. The financial 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 entity.'   

 

 

'

Non-controlling interest

. The equity in a subsidiary not attributable, directly or indirectly, to a 

parent.' 

(IFRS 10, Appendix A) 

 A 

trade

 (or 'simple') 

investment

. An investment in the shares of another entity, that is held for 

 

the accretion of wealth, and is not an associate or a subsidiary. 

 

   

2.2 Investments in subsidiaries 

You should be able to tell from the definitions given above that the important point here is control. In 

most cases, this will involve the holding company or parent owning a majority of the ordinary shares in 

the subsidiary (to which normal voting rights are attached). There are circumstances, however, when the 

parent may own only a minority of the voting power in the subsidiary, but the parent still has control. 

Control can usually be assumed to exist when the parent owns more than half (ie over 50%) of the