Question 4c

You are the financial controller of Omega, a listed entity which prepares consolidated financial statements in accordance with International Financial Reporting Standards (IFRS). You have recently prepared the financial statements for the year ended 30 September 2017 and these are due to be published shortly. The managing director has reviewed these financial statements and has prepared a list of queries arising out of the review.

Query Three 
I’m aware that on 31 December 2016 we acquired a new subsidiary and therefore its results and net assets are included in our consolidated financial statements for the year ended 30 September 2017. I seem to recall from the discussions we held at the time that the year end of this subsidiary is 31 May rather than 30 September. How do we deal with the fact that the year ends are different when we prepare the consolidated financial statements? Do we have to prepare additional special information for this subsidiary when we consolidate? (4 marks)

Required:
Provide answers to the queries raised by the managing director. You should justify your answers with reference to relevant International Financial Reporting Standards.

Note: The mark allocation is shown against each of the four queries above