FAC2601
Notes and
Calculations
,FAC2602
Notes
,Learning unit1: Provisions in respect of companies in a group context
Define a business combination
A business combination is defined as a transaction or another event in
which an acquirer obtains controls of one or more businesses.
Define a parent
A parent is an entity that controls one or more other entities (subsidiaries
Define a subsidiary
A subsidiary is an entity that is controlled by another entity (the parent)
Define a sub-subsidiary
A sub-subsidiary is a subsidiary of another subsidiary
Define control in the investor and investee context?
An investor (parent) controls an investee (subsidiary) when the investor
(parent) is exposed or has rights to variable returns from its involvement
with the investee (subsidiary) and has the ability to affect those returns
through its power over the investee (subsidiary).
An investor (parent) controls an investee (subsidiary) only if all of the
following is true for the investor.
- It has power over the investee (subsidiary)
- Is has exposure or rights to variable returns from its involvement
with the investee.
- It has the ability to use its power over the investee (subsidiary) to
affect the amount of the investor’s returns.
, Explain the difference between simple and complex groups
Simple groups have only one subsidiary where complex groups have more
than one subsidiary.
Learning unit2: consolidation of a wholly-owned subsidiary at date of
acquisition
What are the basic steps when compiling consolidated annual financial
statements?
- Eliminate common items
- Eliminate intragroup items
- Consolidate the remaining items
Net asset value
Premium
Discount
Intragroup items
Common items
Goodwill
Gain from a bargain purchase
Draft the consolidated annual financial statements of a parent and its
wholly-owned subsidiary at date of acquisition in accordance with
International Financial Reporting Standards?
Calculate intragroup and common items?
Calculate goodwill and gain from a bargain purchase at the acquisition of
a subsidiary?
Do the pro-forma consolidation journal entries
Notes and
Calculations
,FAC2602
Notes
,Learning unit1: Provisions in respect of companies in a group context
Define a business combination
A business combination is defined as a transaction or another event in
which an acquirer obtains controls of one or more businesses.
Define a parent
A parent is an entity that controls one or more other entities (subsidiaries
Define a subsidiary
A subsidiary is an entity that is controlled by another entity (the parent)
Define a sub-subsidiary
A sub-subsidiary is a subsidiary of another subsidiary
Define control in the investor and investee context?
An investor (parent) controls an investee (subsidiary) when the investor
(parent) is exposed or has rights to variable returns from its involvement
with the investee (subsidiary) and has the ability to affect those returns
through its power over the investee (subsidiary).
An investor (parent) controls an investee (subsidiary) only if all of the
following is true for the investor.
- It has power over the investee (subsidiary)
- Is has exposure or rights to variable returns from its involvement
with the investee.
- It has the ability to use its power over the investee (subsidiary) to
affect the amount of the investor’s returns.
, Explain the difference between simple and complex groups
Simple groups have only one subsidiary where complex groups have more
than one subsidiary.
Learning unit2: consolidation of a wholly-owned subsidiary at date of
acquisition
What are the basic steps when compiling consolidated annual financial
statements?
- Eliminate common items
- Eliminate intragroup items
- Consolidate the remaining items
Net asset value
Premium
Discount
Intragroup items
Common items
Goodwill
Gain from a bargain purchase
Draft the consolidated annual financial statements of a parent and its
wholly-owned subsidiary at date of acquisition in accordance with
International Financial Reporting Standards?
Calculate intragroup and common items?
Calculate goodwill and gain from a bargain purchase at the acquisition of
a subsidiary?
Do the pro-forma consolidation journal entries
