IFRS 10 Definition of consolidated financial statements
The financial statements of a group in which the assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries are presented as those of a single economic entity.
Parent – An entity that controls one or more entities.
The concept of a single economic entity is illustrated in the example below:
Example – Single economic entity concept
A subsidiary buys an asset from a third party for CU 100. It subsequently sells the asset on to its parent for CU 130. The subsidiary records a profit