A parent company and its subsidiaries may have non-conterminous year-ends.

For the purposes of consolidation, IFRS 10 states that where the reporting date for a parent is different from a subsidiary, the subsidiary should prepare additional financial information as of the same date as the parent unless it is impracticable to do so.

If it is impracticable, IFRS 10 allows the use of the subsidiary’s financial statements prepared up to a date of not more than three months earlier or later than the parent entity’s reporting date, with due adjustments for significant transactions or other events between the dates.

Application to the Given Scenario:

1. Subsidiary with 30 June 2023 year-end:

   • The subsidiary should prepare additional financial statements covering the year ended 31 December 2023 (aligning with the parent).
   • The parent cannot use the subsidiary’s June 2023 figures, as this exceeds the three-month rule.
   • If preparing updated financial statements is impracticable, the subsidiary’s most recent financial statements (June 2023) cannot be used, and it must be excluded from consolidation.

2. Subsidiary with 30 September 2023 year-end:

   • The parent may consolidate the subsidiary’s 30 September 2023 financial statements.
   • However, material transactions between 30 September and 31 December 2023 must be adjusted in the parent’s consolidated financial statements.

Key Considerations:

• Material transactions or events occurring after the subsidiary’s reporting date but before the parent’s reporting date should be adjusted in the consolidated financial statements.
• If a subsidiary’s reporting date exceeds the three-month threshold, its financial results must be updated before consolidation.

Thus, in this case:

• The 30 June 2023 subsidiary must prepare updated statements.
• The 30 September 2023 subsidiary’s statements can be used with adjustments for material transactions.