The exemption of a parent in a wider group

Learning objectives

• Identify the cumulative conditions that exempt an intermediate parent from presenting consolidated financial statements.L1, L2
• Justify, from the facts of a case, whether or not a parent meets all the conditions for the exemption.L2

Normative references

• IFRS 10 §4An entity that is a parent presents consolidated financial statements. It is exempt if it meets all the conditions in para. 4(a): it is a wholly-owned subsidiary, or a partially-owned subsidiary whose other owners, including those not otherwise entitled to vote, have been informed and do not object; its debt or equity instruments are not traded in a public market; it did not file, and is not in the process of filing, its financial statements with a regulator for the purpose of issuing instruments in a public market; its ultimate or any intermediate parent produces financial statements that are available for public use and comply with IFRS Standards, in which subsidiaries are consolidated or measured at fair value through profit or loss in accordance with IFRS 10. This last clarification results from the December 2014 amendments (Investment Entities: Applying the Consolidation Exception), applicable since 1 January 2016 (para. C1D).

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

2 questions

• Which conditions must be met for a parent to be exempt from presenting consolidated financial statements? More than one answer is possible.L2
• Opale SA is 90% owned by Groupe Nacre; the other shareholders have been told that Opale will not present consolidated financial statements and have not objected. Opale's securities are not traded in a public market, Opale has filed nothing with a regulator for a public issue, and Groupe Nacre publishes consolidated financial statements that comply with IFRS and are available for public use. Opale controls several subsidiaries. What is concluded?L2