Coil SA/NV is a company incorporated under the laws of Belgium. Its accounts are IAS compliant. It states in its 1999 accounts (in accordance with IAS 27, para. 13):

Principles of consolidation The consolidated Financial statements include all subsidiaries which are controlled by the Parent Company, unless such control is assumed to be temporary or due to long-term restrictions significantly impairing a subsidiary’s ability to transfer funds to the Parent Company.

Required: Discuss whether these are acceptable reasons for excluding a subsidiary from the consolidated financial statements under IFRS 3.

LO21-3