exemptions from preparing consolidated financial statements
- exemptions from preparing consolidated financial statements
Under the Companies Act a parent company is not required to prepare consolidated financial statements for a financial year in which the group headed by that company qualifies as a small group or a medium-sized group. A group is not eligible for exemption if any member of the group is a public company or a body corporate that has power under its constitution to offer its shares or debentures to the public and may lawfully exercise that power; an authorized institution under the Banking Act (1987); an insurance company; or an authorized person under the Financial Services Act (1986). Under the Companies Act and Financial Reporting Standard 2, Accounting for Subsidiary Undertakings, a parent undertaking is exempt from preparing group accounts when it is itself a subsidiary of a parent company in the European Union and consolidated financial statements are prepared at the highest level. Also, a parent undertaking is exempt from preparing group accounts when all of its subsidiaries are excluded.
Accounting dictionary.
2014.
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