Consolidating financial statements eliminations

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An investment entity is required to measure an investment in a subsidiary at fair value through profit or loss in accordance with IFRS 9 Financial Instruments or IAS 39 Financial Instruments: Recognition and Measurement.[IFRS ] However, an investment entity is still required to consolidate a subsidiary where that subsidiary provides services that relate to the investment entity’s investment activities.[IFRS 10: B88] The parent and subsidiaries are required to have the same reporting dates, or consolidation based on additional financial information prepared by subsidiary, unless impracticable.Where impracticable, the most recent financial statements of the subsidiary are used, adjusted for the effects of significant transactions or events between the reporting dates of the subsidiary and consolidated financial statements.[IFRS ] However, a parent need not present consolidated financial statements if it meets all of the following conditions: [IFRS 10:4(a)] Investment entities are prohibited from consolidating particular subsidiaries (see further information below).Furthermore, post-employment benefit plans or other long-term employee benefit plans to which IAS 19 Employee Benefits applies are not required to apply the requirements of IFRS 10.

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Income and expenses of the subsidiary are based on the amounts of the assets and liabilities recognised in the consolidated financial statements at the acquisition date.

The proportion allocated to the parent and non-controlling interests are determined on the basis of present ownership interests.

[IFRS 10: B94, IFRS 10: B89] The reporting entity also attributes total comprehensive income to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

For instance, the remuneration of the decision-maker is considered in determining whether it is an agent.

[IFRS 10: B58, IFRS 10: B60] Preparation of consolidated financial statements A parent prepares consolidated financial statements using uniform accounting policies for like transactions and other events in similar circumstances.

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