How to consolidate group with previously different year ends which is also switching to IFRS?

How to consolidate group with previously...

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Our Jersey parent company has a year end of 30 June.

Our UK subsidiary has a year end of 31 March. 

Both entities are moving to a year end of 31 December. 

Here is what I think the individual accounts will look like...(please correct me if I'm wrong!).

Parent - 

Current year - 1 July 2014 - 31 December 2014 (6 months)

Comparatives - 1 July 2013 - 30 June 2014 (12 months)

Sub -

Current year - 1 April 2014 - 31 December 2014 (9 months)

Comparatives - 1 April 2013 - 31 March 2014 (12 months)

What about the group accounts?!!

Also - does it matter if this is first time we're preparing under IFRS? Does it make any difference?

Thanks a million in advance!!

Replies (6)

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By johngroganjga
29th Sep 2014 10:26

You will need to explain how the group got round the problem of its non-coterminous year ends when it prepared its last group accounts.

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By johngroganjga
29th Sep 2014 10:43

Just guessing without your response, but let's say the last group accounts included the subsidiary's results for the June 2014 quarter taken from management accounts.

If so, for the December 2014 group accounts you consolidate the subsidiary's 9 month P&L from its statutory accounts minus the three month figures included in the June 2014 consolidation.

I am not sure that IFRS, whether adopted or not, has anything to do with this.  Your question is about the consequences of a group moving (wisely) from non-coterminous to coterminous year ends.  The answer I think is just common sense.

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Replying to DJKL:
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By draze1458
29th Sep 2014 11:03

Thank you.

This is the first time group accounts are to be completed.

I assume the group accounts would look as follows - 

 

CY - 1 July 2014 - 31 December 2014 (6 months)

PY - 1 July 2013 - 30 June 2014 (12 months)

...and we will also need to produce a balance sheet as at 30 June 2012 to prepare a comparative balance sheet.

 

In all cases, we use the subs' year end 31 March accounts and adjust for material items in the intervening three months. 

 

Does this sound correct?

 

Thanks!

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By johngroganjga
29th Sep 2014 11:11

Different question

You didn't mention that the group was previously exempt from having to prepare group accounts.

You need the subsidiary's balance sheet at 30 June 2013 (not 2012) and 30 June 2014.

Otherwise I agree, except that you include the entirety of the subsidiary's results "in the intervening three months" not just the material items.

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Replying to Accountant A:
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By draze1458
29th Sep 2014 11:18

Thank you for such a quick response! Sorry if my question was unclear as I did not say that this is the first year of group accounts. 

How can we do a comparative cash flow statement if we don't also obtain a balance sheet as at 30 June 2012 (i.e. the opening IFRS balance sheet)?

Secondly, my understanding was that IFRS10 permits you to only include material transactions. 

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By johngroganjga
29th Sep 2014 11:58

But your comparatives are for the year end 30 June 2014.  So I don't see why you would need a June 2012 balance sheet for the subsidiary,

I imagine what IFRS10 means is that you wouldn't bother consolidating the subsidiary's results for that three month period if the turnover was 50p and the profit before tax 10p.  But common sense says you either consolidate the whole P&L or none of it.  Apart from anything else you'd have to fudge the closing balance sheet if you didn't consolidate the entire P&L.

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