Objectives of IAS 27
IAS 27 has the twin objectives of setting standards to be applied:
o in the preparation and presentation of consolidated financial statements for a group of entities under the control of a parent; and
o in accounting for investments in subsidiaries, jointly controlled entities, and associates when an entity elects, or is required by local regulations, to present separate (non-consolidated) financial statements.
Key definitions
Consolidated financial statements: the financial statements of a group presented as those of a single economic entity.
Subsidiary: an entity, including an unincorporated entity such as a partnership, that is controlled by another entity (known as the parent).
Parent: an entity that has one or more subsidiaries.
Control: the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.