ASCG paper on information gaps in group financial statements and the role of consolidation
Nov 30, 2017
In November 2017, the Accounting Standards Committee of Germany (ASCG) submitted a paper "Information deficiencies of today’s group f/s and the specific role of consolidation regarding these" for discussion at the upcoming meeting of the Accounting Standards Advisory Forum (ASAF) at the IASB's offices in London on December 7-8, 2017.
The paper states that whilst it is widely acknowledged that transactions with and between members of the same group should not influence the outside appearance of that group and therefore be eliminated, such eliminations do result in a loss of information which is definitely and finally lost for outside users of financial statements. It goes on to note that, furthermore, much of today’s complexity in the environment is not captured in the group’s financial statements although it could highly influence the position, performance and cash flows of the group.
Review the paper on the IASB's website.