Corporate Reporting - Summary
Notes
IFRS 3 Acquisitions & Disposals within group accounts 3
IAS 21 The Effects of Changes in Foreign Exchange Rates 7
IAS 32 Presentation and classification of Financial Instruments 10
IAS 32 Presentation and classification of Financial Instruments 10
Financial Assets 11
IFRS 13 Fair Value Measurement 14
Hedge Accounting 15
IFRS 7 Financial Instruments Disclosures 17
IFRS 2 Share-based Payments 18
Distributable Profits 18
IAS 19 Employee Benefits 19
IAS 36 Impairment of Assets 19
Cash-Generating Units 20
Impairment of goodwill/subsidiary 20
IAS 20 Government Grants 20
IAS 23 Borrowing Costs 21
IAS 37 Provisions, Contingent Liabilities and Contingent Assets 21
IAS 7 Cash flow 22
IAS 40 Investment Property 23
IAS 41 Agriculture 23
IFRS 15 Revenue from contracts with customers 24
IFRS 16 Leases 26
IAS 33 Earnings per Share 27
IAS 12 Income Taxes 28
IFRS 5 Assets held for Sale and Discontinued Operations 30
1
,IFRS 8 Operating Segments 30
IAS 34 Interim Financial Reporting 30
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors 31
IAS 24 Related Party Disclosures 31
Financial Statement Analysis/Ratios 33
2
,IFRS 3 Acquisitions & Disposals within
group accounts
As per IFRS 3 Business Combinations, a step (or ‘piecemeal’) acquisition occurs when the
parent acquires control over a subsidiary in stages (buying shares at different periods)
IFRS 10 & IFRS 3 -> Subsidiaries, IFRS 3 & IAS 28 -> associates
Step Acquisitions
Acquisitions that do not result in a change in control (60% - 80%)
Where the entity increases its investment in an existing subsidiary
● No gain or loss is recognised
● Goodwill is not re-measured
The difference between the fair value of the consideration paid and the change in the non-
controlling interest is recognised directly in the equity attributable to the owners of the
parent.
● Cash X
NCI(change at disposal) X
Balancing figure in equity X X
Achieving significant influence (10% - 40%)
● Classified as an associate and equity accounted
● Any previously held shareholding is treated as having been disposed of and then
reacquired at the fair value at the acquisition date
● Any gain or loss on re-measurement is recognised in the profit and loss or OCI (cost vs
FV of previously held equity interest)
● The investment in associate is calculated as follows:
Consideration transferred X
Fair value of previously held equity interest at X
acquisition date
Share of post-acquisition profits X
Impairment (X)
P% Dividend received (X)
P% Associate PURP where P seller (X)
P% of A’s FV depreciation (X)
Investment in associate X
3
, When control is achieved (40% - 60%)
● Any previous shareholding is treated as having been disposed of (‘deemed disposal’)
and then reacquired at FV @ the acquisition date.
● Goodwill is calculated using the FV @ the acquisition date.
Consideration transferred X
FV of previous holding X
NCI @ acquisition → (New % × NA @ new X
acquisition)
NA @ acquired (X)
Goodwill X
Disposals
Full disposal of subsidiary
● Time apportion the profits of the subsidiary up to the date of disposal;
● Time apportion the NCI;
● Include the gain or loss on disposal in OCI (discontinued operations):
Sale proceeds X
NA of subsidiary @ disposal (X)
Goodwill @ disposal (original goodwill (X)
working – impairments up to date)
NCI @ disposal (original NCI working) X
Profit on disposal X
Under IFRS 5, profit or loss on disposal and profits shown in one line.
Full disposal of associate
● Not normally a discontinued operation → presentation remains the same;
● Time apportion Associates’s PAT up to date of disposal and present as single line being
‘Share of profits of associate’;
● Include group profit or loss on disposal
Sale proceeds X
Cost of investment (X)
Share of post-acquisition profits @ disposal (X)
Impairment of investment to date X
Profit or loss on disposal X/(X)
4
Notes
IFRS 3 Acquisitions & Disposals within group accounts 3
IAS 21 The Effects of Changes in Foreign Exchange Rates 7
IAS 32 Presentation and classification of Financial Instruments 10
IAS 32 Presentation and classification of Financial Instruments 10
Financial Assets 11
IFRS 13 Fair Value Measurement 14
Hedge Accounting 15
IFRS 7 Financial Instruments Disclosures 17
IFRS 2 Share-based Payments 18
Distributable Profits 18
IAS 19 Employee Benefits 19
IAS 36 Impairment of Assets 19
Cash-Generating Units 20
Impairment of goodwill/subsidiary 20
IAS 20 Government Grants 20
IAS 23 Borrowing Costs 21
IAS 37 Provisions, Contingent Liabilities and Contingent Assets 21
IAS 7 Cash flow 22
IAS 40 Investment Property 23
IAS 41 Agriculture 23
IFRS 15 Revenue from contracts with customers 24
IFRS 16 Leases 26
IAS 33 Earnings per Share 27
IAS 12 Income Taxes 28
IFRS 5 Assets held for Sale and Discontinued Operations 30
1
,IFRS 8 Operating Segments 30
IAS 34 Interim Financial Reporting 30
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors 31
IAS 24 Related Party Disclosures 31
Financial Statement Analysis/Ratios 33
2
,IFRS 3 Acquisitions & Disposals within
group accounts
As per IFRS 3 Business Combinations, a step (or ‘piecemeal’) acquisition occurs when the
parent acquires control over a subsidiary in stages (buying shares at different periods)
IFRS 10 & IFRS 3 -> Subsidiaries, IFRS 3 & IAS 28 -> associates
Step Acquisitions
Acquisitions that do not result in a change in control (60% - 80%)
Where the entity increases its investment in an existing subsidiary
● No gain or loss is recognised
● Goodwill is not re-measured
The difference between the fair value of the consideration paid and the change in the non-
controlling interest is recognised directly in the equity attributable to the owners of the
parent.
● Cash X
NCI(change at disposal) X
Balancing figure in equity X X
Achieving significant influence (10% - 40%)
● Classified as an associate and equity accounted
● Any previously held shareholding is treated as having been disposed of and then
reacquired at the fair value at the acquisition date
● Any gain or loss on re-measurement is recognised in the profit and loss or OCI (cost vs
FV of previously held equity interest)
● The investment in associate is calculated as follows:
Consideration transferred X
Fair value of previously held equity interest at X
acquisition date
Share of post-acquisition profits X
Impairment (X)
P% Dividend received (X)
P% Associate PURP where P seller (X)
P% of A’s FV depreciation (X)
Investment in associate X
3
, When control is achieved (40% - 60%)
● Any previous shareholding is treated as having been disposed of (‘deemed disposal’)
and then reacquired at FV @ the acquisition date.
● Goodwill is calculated using the FV @ the acquisition date.
Consideration transferred X
FV of previous holding X
NCI @ acquisition → (New % × NA @ new X
acquisition)
NA @ acquired (X)
Goodwill X
Disposals
Full disposal of subsidiary
● Time apportion the profits of the subsidiary up to the date of disposal;
● Time apportion the NCI;
● Include the gain or loss on disposal in OCI (discontinued operations):
Sale proceeds X
NA of subsidiary @ disposal (X)
Goodwill @ disposal (original goodwill (X)
working – impairments up to date)
NCI @ disposal (original NCI working) X
Profit on disposal X
Under IFRS 5, profit or loss on disposal and profits shown in one line.
Full disposal of associate
● Not normally a discontinued operation → presentation remains the same;
● Time apportion Associates’s PAT up to date of disposal and present as single line being
‘Share of profits of associate’;
● Include group profit or loss on disposal
Sale proceeds X
Cost of investment (X)
Share of post-acquisition profits @ disposal (X)
Impairment of investment to date X
Profit or loss on disposal X/(X)
4
