Uniform accounting policies

Learning objectives

• Explain that consolidated financial statements apply uniform accounting policies and that adjustments are made on consolidation.L2, L3
• Determine the adjustment required when a subsidiary applies a different accounting policy for like transactions.L3

Normative references

• IFRS 10 §19A parent prepares consolidated financial statements using uniform accounting policies for like transactions and other events in similar circumstances.
• IFRS 10 §B87If a member of the group uses different accounting policies, appropriate adjustments are made on consolidation, without changing the subsidiary's own financial statements.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

3 questions

• 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?L2
• Pin SA, a subsidiary of Orme SA, measures certain assets under an accounting policy different from Orme's for similar assets (case data). Pin must keep its policy in its individual accounts, which its auditor has approved. Where is the restatement to harmonise policies made?L3
• Tilleul SA, a subsidiary of the Orme group, applies for its fixed assets an accounting policy different from the group's for similar assets. Write a short note stating what treatment to apply in the consolidated statements, distinguishing case facts, rule and professional judgement.L3