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CHANGES IN DEGREE OF CONTROL
Alternative approach
• The second possible approach that can be used to
prepare the pro forma consolidation journals would be
to assume that on the date that control was lost, the
parent and subsidiary's financials were first combined
as if there was no loss of control (a consolidation took
place).
• This would entail adding the two trial balances of the
parent and subsidiary together on a line-by-line basis.
• When preparing the pro forma consolidation journals,
the basic consolidation procedures will be followed (i.e.
eliminating the original investment in the subsidiary
against the at acquisition equity of the subsidiary, etc).
• After the basic consolidation procedures, the subsidiary
should be derecognised by following the six steps
described in IFRS 10.B98 - .B99.
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