Page 243 - SBR Integrated Workbook STUDENT S18-J19
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Group accounting – Basic groups
Group accounting concepts
1.1 Group accounting definitions
An entity that is a parent is required to prepare consolidated financial statements.
A parent is an entity that controls one or more other entities
A subsidiary is an entity controlled by another entity.
Consolidated financial statements present the assets, liabilities,
equity, income, expenses and cash flows of a parent and its
subsidiaries as if they were a single economic entity.
Parent
Control
Subsidiary
The definition of control is considered later in the chapter. It is normally assumed that
a company controls another company when it owns more than half of the voting
rights.
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