Page 253 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
Confirm that consolidated statements use uniform accounting policies for similar transactions/events. Check
disclosures made in line with AS 21 for different accounting policies when impracticable to harmonize. Ensure
adjustments are made for group member’s financial statements for conformity with group’s policies as per Ind
AS 110. Validate adjustments made to harmonize different accounting policies, including those converting a
component’s GAAP to the consolidated statements' GAAP.
Intra Group Transactions: Ensure intra group transactions and balances are eliminated. Confirm adjustments
related to deferred tax due to elimination of intergroup transaction profits (for Ind AS maintained parent
accounts).
Minorities/Non-controlling Interest: Examine the calculation of minorities/non-controlling interest.
Consolidated P&L: Ensure subsidiary income and expenses are included in consolidated statements from
control acquisition date till control cessation date. Verify such incomes and expenses are based on asset and
liability amounts recognized at acquisition date.

(CNO GA.280) Other Points
1A. Goodwill Impairment:
One key current period adjustment is determining potential impairment loss for consolidation-arising goodwill.
Goodwill from consolidation is valued at the acquisition date of the component and tested for impairment every
balance sheet date.
1B. Impairment Loss Examination:
The auditor should check if the parent determined any impairment loss. If so, the auditor should review the
impairment loss determination procedure. The auditor must ensure the impairment loss amount is fair. If the
impairment loss in a component's goodwill is determined in foreign currency, the auditor should check if any
loss in local currency needs adjustment from the currency translation reserve due to exchange rate fluctuations
since the goodwill's initial consolidation date to the impairment loss determination date.
2. Intragroup Losses:
The auditor should also verify if intragroup losses indicate a required impairment loss recognition in the
consolidated statements. Beyond verifying calculations and disclosures about minorities/non-controlling
interest, the auditor should ascertain if, when minority interests' share of losses surpasses their equity share, the
excess and any subsequent losses for the minority interest are accounted for as per relevant accounting standards.
3. Components' Reporting Date:
The financial statements of the components used in consolidation should align with the parent's reporting date.
If not feasible for some components, adjustments should account for significant events between those dates and
the parent's statement date. The difference in reporting dates shouldn't exceed six months for financial
statements under AS and three months under Ind AS.
The auditor should review the results of other components between their financial reporting date and the
parent's for significant events during the period that need reflection in the consolidated statements. Intervening
events affecting financial position, operations, or cash flows should be recognized either through disclosure or
other means.
The fundamental accounting assumption of "consistency" mandates the auditor to ensure the reporting periods
and financial year-ends remain consistent over time. If there are material changes in the reporting periods of
components in the consolidated statements, the auditor should ensure disclosure of such changes and their
treatment.

(CNO GA.300) Don’t include all notes of Separate Financial Statements.
Sch III: The information required pursuant to Schedule III to the Companies Act, 2013 (‘general instructions
for the preparation of consolidated financial statements’) should be disclosed, given as follows.
In consolidated financial statements, specific details must be disclosed separately for the parent company and its
various components, including foreign subsidiaries. These details include:

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