IPSAS Explained: A Summary of International Public Sector Accounting Standards, 2nd Edition

IPSAS 6: Consolidated and Separate Financial Statements

Objective

The standard sets out requirements of the preparation and presentation of consolidated financial statements of an economic entity under the accrual basis of accounting. In addition, it contains guidance on the scope of a consolidated group of an economic entity and describes the consolidation procedures. It also presents rules on accounting for public sector subsidiaries, jointly controlled public sector entities and associates in the separate financial statements of the controlling entity, the venturer, and the investor.

The IFRS on which the IPSAS is based

IAS 27, Consolidated and Separate Financial Statements

Content

Principal definitions

Economic entity means a group of entities comprising a controlling entity (public sector parent) and one or more controlled entities (public sector subsidiaries).

Control is the power to govern the financial and operating policies of another entity so as to benefit from its activities.

The financial statements of an economic entity are referred to as consolidated financial statements under IPSASs. This is equivalent to the term used under IFRS.

Separate financial statements in accordance with IPSASs are financial statements presented by a controlling entity, an investor in an associate or a venturer in a jointly controlled entity, in which the investments are accounted for on the basis of the direct net assets/equity interest rather than on the basis of the reported results and ...