Taxation (International and Other Provisions) Act 2010 section 482

Actual financial statements drawn up on acceptable principles but consolidating wrong subsidiaries

Section 482 deals with situations where a worldwide group's consolidated financial statements are prepared using acceptable accounting principles but include the wrong subsidiaries — either leaving out entities that should be consolidated or including entities that should not be.

• The section applies when a group's financial statements are prepared on acceptable accounting principles but either fail to consolidate entities that would be required subsidiaries under IAS, or consolidate entities that would not qualify as IAS subsidiaries.
• An "IAS subsidiary" is any entity that would need to be consolidated with the ultimate parent's results if the group's financial statements were prepared under International Accounting Standards.
• Where the wrong subsidiaries are consolidated, the actual financial statements are disregarded for the purposes of the corporate interest restriction rules, and replacement consolidated statements covering the ultimate parent and its correct IAS subsidiaries are treated as having been prepared instead.
• The replacement financial statements are treated as having been prepared using the same accounting principles and practices as the original (incorrect) statements, so only the scope of consolidation changes — not the underlying accounting framework.