A question could well feature parent, subsidiary and an associate, or even a parent, subsidiary and a joint venture.
It is important to understand how the group in the question is structured so as to then apply IAS 27, 28, 31 or 39 correctly.
Group Structure Take care to understand the composition of the group in the question.
” One look out the window gave me the answer: our next door neighbor had been changing his oil, when the car slipped off the jack, crushing him beneath its weight. Plumber and electricians exist today because most of us have no business attempting to tackle work that requires skills gained only through years of training and experience.
The parent, in turn, controls one or more subsidiary companies (subsidiaries).
The majority of treasurers work in group organisations.
During the year the holding company acquired the shares in an existing trading company.
The subsidiary had bought a freehold property 12 years ago, which it had revalued in its own accounts, so there is a significant revaluation reserve in the subsidiary. The subsidiary is releasing its revaluation reserve in line with the depreciation of the revalued property.
(This follows on from Steve’s last article ‘Consolidating your knowledge about Consolidated Accounts’).