CERTYNEX IFRS ACADEMY

A subsidiary applies, for transactions similar to the group's, an accounting policy different from the parent's. How does the parent prepare its consolidated financial statements?

It changes the subsidiary's own financial statements so that they apply the group's policies, before taking their amounts into the consolidation.

It takes the subsidiary's published amounts as they are, policy differences having no effect on presenting the group as a single entity.

It presents separately the subsidiary's amounts prepared under other policies, without aligning them with the consolidated items of the rest of the group.

It applies uniform policies and makes the necessary adjustments within the consolidation, without changing the subsidiary's own financial statements.