Consolidation

Abstract

The Act requires that ‘if at the end of a financial year a company is a parent company the directors shall, as well as preparing individual accounts for the year, prepare group accounts’. [s227(1)] It follows from this that the assessment of whether group accounts are required depends on the situation at the balance sheet date; where a parent has held subsidiaries during a period, but at its balance sheet date no longer has any subsidiaries, then group accounts are not required. The Act also requires group accounts to be presented as consolidated accounts.