CAF-4 · Chapter 25 · Question 13 of 19
When a public company (the holding company) acquires a controlling stake in another company (the subsidiary), what obligation does the subsidiary's board have regarding its financial year?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) It must ensure its financial year coincides with that of the holding company, unless there are valid reasons against it.
Explanation
For the purposes of consolidated financial statements, the board of the subsidiary shall ensure that the financial year of the subsidiary coincides with that of the holding company, except where valid reasons exist against it.
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