The preparation of consolidated financial statements:
A) obviates the need for separate entities to prepare and release their own separate financial statements.
B) does not obviate the need for separate entities to prepare and release their own separate financial statements.
C) should be done in accordance with AASB 10.
D) does not obviate the need for separate entities to prepare and release their own separate financial statements and should be done in accordance with AASB 10.

Question

Quizplus · Accepted Answer

Consolidated financial statements are prepared by a parent company to present its financial position as if it and its subsidiaries were a single entity. However, this does not eliminate the requirement for each separate entity to prepare and release its own financial statements. Additionally, the preparation of consolidated financial statements should follow specific accounting standards, such as AASB 10, which provides the framework for such consolidation.

The Preparation of Consolidated Financial Statements