Summary IAS 28 associates

IAS 28:
ASSOCIATES

,JOURNALS
DR investment in associate (SFP)
DR dividends received (PL) (portion of dividend received)
CR RE-since(SCE) (since portion of RE)
CR revaluation surplus (SCE) Revaluation in since before CY
CR share of other comprehensive income of associate (OCI) Revaluation of associate in CY
Cr share of profit of associate (PL) (current year portion of profit)

DR investment in associate (SFP)
CR RE-since (SCE)
(for the gain on bargain purchase)


DR interest received (PL) interest from intragroup loan (interest income from associate )
CR share of profit of associate (PL)


INVENTORY
(P-> A) (A-> P)
DR revenue (P)(PL) ( Closing amount x associate %) DR share of profit of associate (A)(PL)
CR cost of sales (P)(PL) (closing amount x CP/SP x associate %) CR Inventory (SFP) (P)
CR investment in associate (SFP) (closing amount x GP/SP x
associate %)

DR deferred tax (SFP) DR deferred tax (SFP)
CR income tax expense (PL) CR share of profit of associate (A)(PL)
(investment in associate amount x 28%)

in the following year: opening balance adjustment in the following year: opening balance adjustment
DR RE-since (P)(SCE) DR RE-since (A)(SCE)
DR deferred tax (SFP) DR deferred tax (SFP)
DR cost of sales (PL) CR share of profit of associate (A)(PL)
CR revenue (PL)

DR income tax expense (P)(PL) DR share of profit of associate (A)(PL)
CR deferred tax (SFP) Cr deferred tax (SFP)
(same as previous year )



There is NO journal if the associate subsequently sells the
OB inventory on hand to an Unrelated 3rd party

,PPE
P-> A A-> P
DR profit with sale (P)(PL) (amount x associate %) Dr share of profit of associate (PL)
CR investment in associate (A)(SFP) CR asset (SFP)

DR deferred tax (SFP) DR deferred tax (SFP)
CR income tax expense (PL) CR share of profit of associate (PL)
(eliminating UR profit )
DR Investment in associate (A)(SFP)
(profit X associate % x depreciation for current year) DR accumulated depreciation (SFP)
CR Depreciation (PL)(P) CR Share of profit of associate (PL)
(UR profit x associate % / remaining useful life)
DR income tax expense (P)(PL) DR Share of profit of associate (PL)
CR deferred tax (SFP) CR deferred tax (SFP)

following year opening balance following year opening balance
DR RE-since (P)(SCE) DR RE-since (A)(SCE)
DR investment in associate (SFP) (accumulate dep) DR Accumulated depreciation (SFP)
DR deferred tax (SFP) DR Deferred tax (SFP)
CR investment in associate (SFP) CR asset (SFP)




PPE-> INVENTORY
P-> A A->P
DR profit on sale of PPE (PL) DR share of profit of associate (PL)
CR investment in associate (SFP) CR inventory (SFP)

DR deferred tax (SFP) DR deferred tax(SFP)
CR income tax expense (PL) CR share of profit of associate (PL)

adjusting opening balance adjusting opening balance
DR RE-since (SCE) DR RE-since (SCE)
DR deferred tax (SFP) DR deferred tax(SFP)
CR investment in associate (SFP) CR inventory (SFP)

Sale to 3rd party (Associate sells to 3rd party) Sale to 3rd party (parent sells to 3rd party)
DR investment in associate (SFP) DR inventory (SFP)
CR profit on sale of PPE(PL) CR share of profit of associate (PL)

DR income tax expense (PL) DR share of profit of associate (PL)
CR deferred tax (SFP) CR deferred tax

, INVENTORY -> PPE
P-> A A->P
Dr revenue(PL) DR share of profit of associate (PL)
CR Cost of sales (PL) CR PPE (SFP)
CR investment in associate (SFP) (profit x associate %)

DR deferred tax (SFP) DR deferred tax(SFP)
CR income tax expense (PL) CR share of profit of associate (PL)

UR profit realizing through dep UR profit realizing through dep
DR investment in associate (SFP) DR accumulate dep (SFP)
DR COS (PL) CR share of profit of associate (PL)
CR Revenue (PL)

DR income tax expense (PL) DR share of profit of associate (PL)
CR deferred tax (SFP) CR deferred tax

adjusting opening balance adjusting opening balance
DR RE-since (SCE) DR RE-since (SCE)
DR deferred tax (SFP) DR deferred tax(SFP)
CR investment in associate (SFP) DR accumulate depreciation (SFP)
CR PPE (SFP)




QUICK SUMMARY
PPE
Parent ➔ associate
profit on disposal investment in associate (PPE)
depreciation investment in associate (acc dep)

Associate ➔ Parent
share of profit of associate PPE
share of profit of associate Accumulate dep


TAX:
parent sells
income tax
deferred tax

Associate sells
Share of profit of associate
deferred tax