ACCA FR Classroom - Syllabus A4. The Concepts and Principles of Groups 4 / 4
a) Describe the concept of a group as a single economic unit.
b) Explain and apply the definition of a subsidiary within relevant accounting standards.
c) Using accounting standards and other regulation, identify and outline the circumstances in which a group is required to prepare consolidated financial statements.
d) Describe the circumstances when a group may claim exemption from the preparation of consolidated financial statements.
e) Explain why directors may not wish to consolidate a subsidiary and when this is permitted by accounting standards and other applicable regulation.
f) Explain the need for using coterminous year ends and uniform accounting polices when preparing consolidated financial statements.
g) Explain why it is necessary to eliminate intra group transactions.
h) Explain the objective of consolidated financial statements.
i) Explain why it is necessary to use fair values for the consideration for an investment in a subsidiary together with the fair values of a subsidiary’s identifiable assets and liabilities when preparing consolidated financial statements.
j) Define an associate and explain the principles and reasoning for the use of the equity method of accounting