To include amounts in the group financial statements, the accounting principles and valuation rules in Part III of Schedule 3A should be used consistently.

A holding company should use the same valuation methods in its group and entity financial statements. If the standards differ, both should disclose the applicable standards and provide reasons. Exceptions apply if the directors think this is necessary for a fair and accurate view.

If certain assets and liabilities in the group financial statements have been assessed by undertakings with different accounting rules, these values or amounts should be adjusted to fit the group rules. There's no need for adjustment if the figures aren't material to the view. Directors can depart from the stipulated rule (with stated reasons and effects).

Group financial statements should show the assets, liabilities, financial position, and profit or loss for the financial year of the holding company and all undertakings as if they were a single entity.

• Debts, claims, income, and expenditure related to transactions among the undertakings should be eliminated.
• If there are profits and losses from transactions between undertakings included in the asset book values, they should be discarded.

Such adjustments are not required if the sums are not significant to the overall picture.

Consolidation methods should remain consistent throughout each financial year. If special reasons exist to depart from this requirement, they can do so with the reasons and impact outlined in the notes to the group statements.

When an undertaking becomes a subsidiary, it's noted as an "acquisition". Accounting should be done using the acquisition method, except in conditions where the merger method can be applied.

The acquisition method involves including the assets and liabilities of the acquired undertaking at their fair values. The income and expenditure are considered only from the date of acquisition. An amount - the acquisition cost of the interest in the shares of the acquired undertaking - is calculated. It's treated as goodwill if positive or as negative goodwill if not.

For accounting to consider an acquisition as a merger, the same party should ultimately control all entities involved both before and after the business combination, that control should be permanent, and the merger method must comply with accepted accounting principles.

If the merger method is used on an acquisition, particular information about the undertaking and ultimate controlling party must be shared in the notes to the financial statements.

When a group is acquired, paragraphs 12 to 17 apply with adaptations. This basically substitutes references to shares, assets and liabilities, income and expenditure, and capital and reserves to those of the whole group.

If a significant change has occurred in the group composition in the course of a financial year, the information presented in the group statements should still be comparable to previous years.

A joint venture, where a holding company or one of its subsidiaries manages another undertaking jointly with one or more undertakings not consolidated in the group financial statements is allowed. This undertaking can be proportionally consolidated in the group financial statements if it's not a subsidiary. Normal rules apply, with necessary modifications.

An associated undertaking is a participating interest which an undertaking in the group statements significantly influences, and is not a subsidiary of the holding company.