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IFRS 10 says that an investor has control over potential subsidiary when it has: 3 începe să înveți
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Power over the investee. | Exposure or rights to VARIABLE returns from involvement in the investee. | The ability to use power over the investee to AFFECT the investor's returns. An entity that is a parent is required to produce consolidated financial statements.
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IFRS 3 states that the ... method is used to account for business combinations. începe să înveți
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A BUSINESS COMBINATION is where an acquirer obtains... începe să înveți
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Optional ... test can be used to assess whether an acquired set of assets is NOT a business. începe să înveți
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Concentration test concept. 4cz începe să înveți
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The acquired assets are NOT A BUSINESS | if substantially all of the FV of the total assets acquired | is concentrated in a single identifiable asset | or group of similar identifiable assets.
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If the concentration test is not met, a detailed assessment is required to assess if a business as being acquired. To meet the definition of a business... începe să înveți
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inputs and substantive processes must have been acquired that can contribute to the creation of outputs. The outputs themselves are not required.
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2cz începe să înveți
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Economic resources | that can create outputs once processes are applied.
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2cz începe să înveți
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Systems, standards or rules | that can create outputs when applied to inputs. SSR
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3cz începe să înveți
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Goods, services and income.
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The acquisition method has 5 requirements: 5 începe să înveți
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Identify the acquirer. | Identify the acquisition date. | Recognise the subsidiary net asset at FV, | Goodwill | and NCI.
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The acquirer is the entity that has assumed control over entity. The acquirer is NORMALLY the company that transferred ... in the business combination. 3cz acquisition method - identify the acquirer începe să înveți
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cash, | or other assets | or shares
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Acquisition method - identify the acquirer. Other* factors to consider: 3 *other than cash, other assets or equity transference. începe să înveți
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Which entity's former management dominates the combined entity? | Which entity's former owners have the greatest number of votes in the combined entity. | Which entity was bigger. former management domination | former owner voting rights | size of former entities
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Identify the acquisition date definition. The acquisition method. începe să înveți
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The date on which the parent obtained control over the subsidiary.
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Professional fees - accounting treatment The acquisition method - recognise the net assets începe să înveți
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Why the use of NCI at acquisition at FV measure or Proportionate method choice has significant impact on impairment review? începe să înveți
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The group has recognised FULL GOODWILL so this can be added together with the other net assets of the subsidiary and compared with the recoverable amount. Only the group's share of goodwill has been recognised, so goodwill MUST BE GROSSED UP to include the NCI's share PRIOR TO the impairment review.
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IAS 28 începe să înveți
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'an entity over which the investor has significant influence'
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Significant influence DEFINITION: 3cz începe să înveți
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The power to participate | in the financial and operating | policy decisions of an entity.
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A holding of between 20% and 50% of the ... is presumed to give significant influence. începe să înveți
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Joint arrangements definition: începe să înveți
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arrangements where 'two or more parties have joint control' This exist when the relevant activities require unanimous consent of the parties that share control.
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Joint control exist when: 2cz începe să înveți
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when the relevant activities require unanimous consent of the parties that share control over the entity. relevant activities | unanimous consent
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types of Joint arrangements: 2 începe să înveți
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joint operation | joint venture
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Joint operation - venturers have rights to... 2 începe să înveți
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assets | and obligations of the arrangement.
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Joint venture - venturers have rights to... începe să înveți
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to net assets of the arrangements. A joint venture is normally a separate entity.
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Joint venture accounting treatment. începe să înveți
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The same as associates.
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Joint operation accounting treatment: începe să înveți
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Accounts for share of assets, liabilities, income and expenses. ALIE
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In separate FSs, investments in subsidiaries, joint ventures or associates can be accounted for in one the following ways: 3 | IAS 27 începe să înveți
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Cost.| Equity method.| In accordance with IFRS 9 Financial Instruments.
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