Core concepts
- 01Control: power over investee + exposure to variable returns + ability to use power.
- 02All investees controlled must be consolidated regardless of voting %.
- 03Consolidation: line-by-line addition; eliminate intra-group balances, transactions, unrealised profits.
- 04Non-controlling interest (NCI) measured at fair value or proportionate share of net assets (choice per acquisition under Ind AS 103).
- 05Loss of control: re-measure retained interest at FV, recognise gain/loss in P&L.
Flowchart summary
Consolidation Process | Combine assets & liabilities (line-by-line) | Eliminate intra-group: P&L, balances, dividends, unrealised profit | Compute Goodwill = Cost + NCI + FV of previous interest − Net Assets FV | Recognise NCI's share of profit & equity
Exam-critical pointers
- ⭐Step acquisition: re-measure previous equity interest to FV at date of obtaining control.
- ⭐Distinguish associate (Ind AS 28 — equity method) from subsidiary (control, consolidate).
- ⭐Joint arrangement: JV (equity method) vs JO (proportionate share of A&L).
- ⭐Common control transactions: pooling of interest method under Appendix C of Ind AS 103.
Make it click