International Accounting Standard 27 : A Great Deal Of Importance On The Perception Of Control Within Group Accounts

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International accounting standard 27 illustrates a great deal of importance on the perception of control within group accounts. This report focuses on evaluating how important the notion of control is in deciphering whether or not group accounts have to be initially created. Throughout this report the concept of control, within group accounting, will be evaluated and critically analysed to gain a wider understanding thus resulting in a relevant interpretation being produced. The advantages and disadvantages of the concept of control will be analysed along with any other international accounting standards that are deemed relevant. Once all information has been gathered and critically analysed an appropriate conclusion will be drawn up.…show more content…
IAS27 was amended in 2011 and therefore supersedes any previous IAS27 policies that were in place. This policy is directly linked to all yearly accounting periods on 1st January 2014 onwards and is applicable when a company prepares separate financial statements that meet the terms and conditions of the International Financial Reporting Standards. IAS27 focuses on separate financial statements and consolidations when an organisation combines with another business. Deloitte (2011) points out that IAS27 will guide the entity on how to deal with an adjustment of ownership within business and also accommodates for how to arrange separate financial statements with any subsequent disclosures. Furthermore according to Deloitte (2011) there are two main objectives when it comes to the application of IAS27 and they are; firstly the collaboration and management of consolidated financial accounting statements for several businesses under the strict control of the parent in charge and secondly in accounting for investments regarding subsidiaries to create separate, non-consolidated, financial statements. These financial accounting statements will be formally constructed by the parent company, an associate organisation or a joint venture. However the predicament with IAS27 is that it creates a problem for organisations with previous transactions involving their subsidiaries,
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