nsolidated financial statements of a subsidiary company can not prepare consolidated financial statements, if ninety percent or more of its voting stock or share capital is owned by its parent company and other shareholders (participants) are not require preparation of consolidated financial statements. Consolidated statements can be made either by Russian rules, or IFRS. If the company is reporting in accordance with IFRS, it may not be consolidated in accordance with Russian regulations. In practice, many parent organizations are consolidated. Russian accounting rules focus primarily on individual reporting entity.of subsidiary for the purpose of consolidation is an important distinction between the three accounting systems.key in determining whether the relationship characteristic of the relationship between parent and subsidiary companies, is the notion of control. Control - the ability of the parent to govern the financial and operating policies of the subsidiary for the purpose of economic gain. It is believed that control exists when the parent company directly or indirectly through subsidiaries, owns 50% of the vote (voting shares). The control is also present when the property of the parent company are half or less than half of the voting rights, but it has a legal or contractual rights to which they are able to control a majority of votes or the Board of Directors of the company . The parent can have control over the company even if it owns less than 50% of the voting shares of the company, and it has neither the treaty nor the legal rights, under which it would control the majority of the voting rights or the Board of Directors of the Company (effective control). Purchase (sell) the company are included (excluded) from the consolidated financial statements from the date of change of control. It is also necessary to take into account the existence of potential voting rights that can be used at the moment, in determining the existence of control. Controlled special purpose entities subject to consolidation (see below) .. S. GAAP is used bipolar consolidation model. All decisions relating to the consolidation in the first place should be estimated using a model with a variable interest in the company. If a company is a company with a variable interest entity (CPA), management must use the instructions in "special purpose entities" (see below). Companies controlled through voting shares, are consolidated as subsidiaries. In US GAAP, there is a concept analogous to the concept of de facto control, referred to as В«effective controlВ» - effective control. In practice, this concept is rarely used. Accordingly, there may be situations in which the company consolidated in accordance with IFRS based on the concept of de facto control. In this case, the consolidation in accordance with US GAAP and the concept of effective control is not possible.Definition subsidiary based on the ability to influence the decisions taken by t...
