Which consolidation theory should be used in preparing consolidated financial statements in accordance with IFRS?
A) Proprietary Theory.
B) Parent Company Theory.
C) Proportionate Consolidation.
D)Either Entity Theory or Parent Company Extension Theory.

Question

Quizplus · Accepted Answer

According to IFRS, there are two acceptable methods for consolidation: Entity Theory and Parent Company Extension Theory. Both methods require the preparation of consolidated financial statements that include the financial information of both the parent company and its subsidiaries. Therefore, the correct answer is D since it encompasses both methods.

Which Consolidation Theory Should Be Used in Preparing Consolidated Financial