ACCA FA Syllabus G. Preparing Simple Consolidated Financial Statements - Terms - Notes ^{1 / 11}

Group accounting

• Parent

  An entity that has one or more subsidiaries

• Subsidiary

  An entity, including an unincorporated entity such as a partnership, that is controlled by another entity (known as the parent).

• Control

  The power to govern the financial and operating policies of an entity so as to obtain benefits from its activities

• Consolidated or group financial statements

  The financial statements of a group presented as those of a single economic entity.

• Non-controlling interest

  Non-controlling interest (NCI) arises when the parent entity controls a subsidiary but does not own 100% of it; e.g. if P owns only 70% of the ordinary shares of S, there is a NCI of 30%

• Trade/simple investment

  An investment in the shares of another entity, that is held for the accretion of wealth, and is not an associate or a subsidiary. Trade investments are shown as investments under non-current assets in the consolidated SFP of the group.