Group Accounts

A company can have investments in other companies in the form of: ordinary shares, preference shares and loan stock. The investment in ordinary shares leads to ownership and therefore requires further consideration. The investment in the ordinary shares can be summarized diagrammatically as follows;

NOTE:

1. Company A is referred to as a subsidiary company and is accounted as per the requirements of 1AS 27 “ subsidiary company and separate financial statements.”

2. Company B is a jointly controlled entity and is accounted for according to the requirements of  1AS  31 “joint ventures”.

3. Company C is an Associate company and is accounted for as per requirements of 1AS/28 “Associate companies”.

4. Company D is a pure investment accounted for as per requirements of 1AS 32 and 39 “financial instruments.
Jointly controlled entities and pure investments are beyond scope.