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(147)-EXCLUSION OF SUBSIDIARY UNDERTAKINGS FROM GROUP ACCOUNTS

Tuesday, April 6, 2010

Exclusion of Subsidiary Undertakings from Group Accounts

Financial reporting standards (FRS) states that a subsidiary must be excluded from consolidation in the following circumstances.
  • Serve long term restrictions are substantially hindering the exercise of the parent’s rights over the subsidiary’s assets or management.
  • The group’s interest in the subsidiary undertaking is held exclusively with a view to subsequent resale and the subsidiary has not been consolidated previously.
  • The subsidiary undertaking’s activities are so different from those of other undertakings to be included in the consolidation that its inclusion would be incompatible with the obligation to give a true and fair view.


The financial reporting standards (FRS) require the circumstances in which subsidiary undertakings are to be excluded from consolidation to be interpreted strictly.

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