Summary Group accounting -
2025/2026
Inhoud
1. Introduction.................................................................................................................................................................4
Useful notations....................................................................................................................................................4
Key learning objectives:.........................................................................................................................................4
2. Requirements to prepare consolidated financial statements......................................................................................4
2.1. Definitions...........................................................................................................................................................4
2.2. Requirements......................................................................................................................................................5
General principle...................................................................................................................................................5
Exception to this principle.....................................................................................................................................5
3. Definition of control....................................................................................................................................................5
3.1. What does control mean?...................................................................................................................................5
Definition...............................................................................................................................................................5
4. Assessing control.........................................................................................................................................................6
4.1. Important elements.............................................................................................................................................6
Evaluating power...................................................................................................................................................6
4.2. Examples of having control..................................................................................................................................7
5. Four types of investments...........................................................................................................................................8
5.1. Definitions: which 4 types?..................................................................................................................................8
(1) Subsidiary (IFRS 10)..........................................................................................................................................8
(2) Associate (IAS 28).............................................................................................................................................8
(3) Joint arrangement (IFRS 11).............................................................................................................................8
(4) Other investments (IAS 39 en IFRS 9)...............................................................................................................8
6. Consolidation procedures............................................................................................................................................9
6.1. Preparation of a consolidated financial statement of financial position..............................................................9
What is the consolidation process?.......................................................................................................................9
reporting dates?....................................................................................................................................................9
6.2. Examples...........................................................................................................................................................10
7. Goodwill arising on consolidation..............................................................................................................................10
7.1. What is goodwill?..............................................................................................................................................10
When does this occur?........................................................................................................................................10
Accounting treatment of goodwill?.....................................................................................................................10
8. Partly owned subsidiaries..........................................................................................................................................12
8.1. What?................................................................................................................................................................12
Definition.............................................................................................................................................................12
Impact on consolidation......................................................................................................................................12
8.2. Example.............................................................................................................................................................12
8.3. Non-controlling interests...................................................................................................................................14
how do we measure NCI?....................................................................................................................................14
9. Elimination of intra-group balances...........................................................................................................................14
10. Unrealised profits....................................................................................................................................................14
11. The group statement of comprehensive income.....................................................................................................15
11.1. What?..............................................................................................................................................................15
11.2. Example...........................................................................................................................................................15
1
,12. The group statement of equity................................................................................................................................17
13. Subsidiary acquired part way through an accounting period l.................................................................................17
13.1. Impact on consolidation..................................................................................................................................17
13.2. Example...........................................................................................................................................................17
Question..............................................................................................................................................................17
Solution...............................................................................................................................................................18
14. Business combination..............................................................................................................................................19
What is a business combination ?.......................................................................................................................19
How are business combinations structured ?......................................................................................................19
How does the acquirer obtain control of one or more businesses ?...................................................................19
What is a business ?............................................................................................................................................19
15. Measuring consideration.........................................................................................................................................20
Definition.............................................................................................................................................................20
What does this mean in practice ?......................................................................................................................20
When is the acquisition date?.............................................................................................................................21
Accounting for Contingent consideration............................................................................................................21
What is part of the business combination ?........................................................................................................21
16. Recognition and measurement principles...............................................................................................................22
2 important principles.........................................................................................................................................22
How do we measure non-controlling interests?..................................................................................................22
when is the acquisition date?..............................................................................................................................22
Allocation of income and expenses.....................................................................................................................22
Acquiree’s intangible assets................................................................................................................................23
which Items are not identifiable according to the recognition principles?..........................................................23
Exceptions to the recognition and measurement principles...............................................................................23
When can a Restructuring provisions be recognized?.........................................................................................24
Which restructuring costs are included or excluded?..........................................................................................24
17. Goodwill.................................................................................................................................................................. 25
Definition.............................................................................................................................................................25
Recognition and measurement...........................................................................................................................25
Subsequent treatment of goodwill......................................................................................................................25
Calculating goodwill............................................................................................................................................25
18. Bargain purchases....................................................................................................................................................25
What is a bargain purchase.................................................................................................................................26
Reassessment......................................................................................................................................................26
EXAMPLE.............................................................................................................................................................26
19. Initial accounting determined provisionally.............................................................................................................26
General principle?...............................................................................................................................................26
The measurement period....................................................................................................................................26
Conditions for adjustment...................................................................................................................................27
Use of provisional values.....................................................................................................................................27
What can be adjusted ?.......................................................................................................................................27
Retrospective adjustments..................................................................................................................................27
Adjusted items....................................................................................................................................................27
Adjustments to unrecognized items....................................................................................................................27
EXAMPLE: Adjustments to provisional values......................................................................................................28
Deferred tax arising from a business combination..............................................................................................28
20. Business combinations achieved in stages...............................................................................................................29
Principles to be applied.......................................................................................................................................29
How do we measure goodwill (or gain from a bargain purchase)?......................................................................29
Control achieved in stages...................................................................................................................................29
21. Joint arrangements..................................................................................................................................................30
Definition of Joint Arrangements........................................................................................................................30
2
, (1)A joint operator...............................................................................................................................................31
(2)A joint venturer...............................................................................................................................................31
Overview.............................................................................................................................................................32
22. Accounting for interests in a joint operation...........................................................................................................32
Financial statements of a joint operator..............................................................................................................32
Interests in an joint operation not having joint control.......................................................................................33
23. Previously held interests..........................................................................................................................................33
24. Accounting of an interest in a joint venture.............................................................................................................33
investment..........................................................................................................................................................33
When is IAS 28 applicable ?.................................................................................................................................33
25. Associate..................................................................................................................................................................34
definitions ?.........................................................................................................................................................34
How is significant influence achieved?................................................................................................................34
26. Equity method.........................................................................................................................................................34
What ?.................................................................................................................................................................34
Exemptions of the equity method.......................................................................................................................34
27. Associates and Joint Ventures classified as held for sale.........................................................................................35
Applying IFRS 5 or IAS 28 ?..................................................................................................................................35
28. Equity method procedures......................................................................................................................................35
2 important aspects.............................................................................................................................................35
Potential voting rights when applying equity method.........................................................................................37
Summary of the equity method procedures.......................................................................................................37
29. Reduction in ownership interest..............................................................................................................................37
30. Transactions with Associates and Joint Ventures.....................................................................................................38
‘Downstream’ transactions..................................................................................................................................38
‘Upstream’ transactions......................................................................................................................................38
Contribution of assets for equity interests..........................................................................................................39
31. Reporting periods and accounting policies..............................................................................................................39
Reporting periods................................................................................................................................................39
Different accounting policies...............................................................................................................................39
32. Impairment losses...................................................................................................................................................39
Testing for impairment........................................................................................................................................39
Determining value in use.....................................................................................................................................40
Group accounting: 8/20
International accounting: 12/20
2 separate examens with 1h for group accounting
3
, 1.Introduction
Extra resources : www.deloittteifrslearning.com
USEFUL NOTATIONS
IAS = international accounting standard
IFRS = international financial reporting standards
IFRS 3 Business Combinations
IFRS 10 Consolidated Financial Statements
IFRS 11 Joint Arrangements
IFRS 12 Disclosure of Interests in Other Entities
IAS 28 Investments in Associates and Joint Ventures
KEY LEARNING OBJECTIVES:
- Explain what is meant by a set of consolidated financial statements;
- Define the terms “group”, “parent”, “subsidiary” and “control” as per IFRS 10;
- Prepare a group statement of financial position both at the date of acquisition and subsequent to
acquisition, accounting correctly for goodwill;
- Prepare a group statement of financial position in cases where subsidiaries are either wholly owned or
partly owned, dealing correctly with non-controlling interests;
- Eliminate intra-group balances and eliminate unrealized profits arising on the transfer of assets between
group companies at more than cost;
- Prepare a group statement of comprehensive income, eliminating intra-group items in accordance with the
requirements of iFRS 10;
- Account correctly for a non-controlling interest in the profits of a subsidiary;
- Prepare a group statement of comprehensive income in the situation where a parent company has acquired
a subsidiary part of the way though the accounting period;
- Define the terms ‘associate’ and ‘significant influence’ in accordance with IAS 28;
- Explain the equity method of accounting and apply this method when accounting for an investment in an
associate;
- Define the terms “joint arrangement”, “joint control” in accordance with IFRS 11;
- Distinguish between a joint operation and a joint venture;
- Account correctly for an interest in a joint operation or a joint venture
2.Requirements to prepare consolidated financial
statements
2.1. Definitions
Consolidated financial statements or group accounts are
- The financial statements of a group in which the assets, the liabilities, equity, income, expenses and cash
flows of the parent and its subsidiaries are presented as those of a single entity.
- The consolidated financial statements only contain balances and transactions with third parties.
Intercompany balances and transactions have to be eliminated
- Consolidated financial statements are often referred to as group accounts
Group is a parent and its subsidiaries
Parent is an entity that controls one or more entities
A subsidiary is an entity that is controlled by another entity
4
2025/2026
Inhoud
1. Introduction.................................................................................................................................................................4
Useful notations....................................................................................................................................................4
Key learning objectives:.........................................................................................................................................4
2. Requirements to prepare consolidated financial statements......................................................................................4
2.1. Definitions...........................................................................................................................................................4
2.2. Requirements......................................................................................................................................................5
General principle...................................................................................................................................................5
Exception to this principle.....................................................................................................................................5
3. Definition of control....................................................................................................................................................5
3.1. What does control mean?...................................................................................................................................5
Definition...............................................................................................................................................................5
4. Assessing control.........................................................................................................................................................6
4.1. Important elements.............................................................................................................................................6
Evaluating power...................................................................................................................................................6
4.2. Examples of having control..................................................................................................................................7
5. Four types of investments...........................................................................................................................................8
5.1. Definitions: which 4 types?..................................................................................................................................8
(1) Subsidiary (IFRS 10)..........................................................................................................................................8
(2) Associate (IAS 28).............................................................................................................................................8
(3) Joint arrangement (IFRS 11).............................................................................................................................8
(4) Other investments (IAS 39 en IFRS 9)...............................................................................................................8
6. Consolidation procedures............................................................................................................................................9
6.1. Preparation of a consolidated financial statement of financial position..............................................................9
What is the consolidation process?.......................................................................................................................9
reporting dates?....................................................................................................................................................9
6.2. Examples...........................................................................................................................................................10
7. Goodwill arising on consolidation..............................................................................................................................10
7.1. What is goodwill?..............................................................................................................................................10
When does this occur?........................................................................................................................................10
Accounting treatment of goodwill?.....................................................................................................................10
8. Partly owned subsidiaries..........................................................................................................................................12
8.1. What?................................................................................................................................................................12
Definition.............................................................................................................................................................12
Impact on consolidation......................................................................................................................................12
8.2. Example.............................................................................................................................................................12
8.3. Non-controlling interests...................................................................................................................................14
how do we measure NCI?....................................................................................................................................14
9. Elimination of intra-group balances...........................................................................................................................14
10. Unrealised profits....................................................................................................................................................14
11. The group statement of comprehensive income.....................................................................................................15
11.1. What?..............................................................................................................................................................15
11.2. Example...........................................................................................................................................................15
1
,12. The group statement of equity................................................................................................................................17
13. Subsidiary acquired part way through an accounting period l.................................................................................17
13.1. Impact on consolidation..................................................................................................................................17
13.2. Example...........................................................................................................................................................17
Question..............................................................................................................................................................17
Solution...............................................................................................................................................................18
14. Business combination..............................................................................................................................................19
What is a business combination ?.......................................................................................................................19
How are business combinations structured ?......................................................................................................19
How does the acquirer obtain control of one or more businesses ?...................................................................19
What is a business ?............................................................................................................................................19
15. Measuring consideration.........................................................................................................................................20
Definition.............................................................................................................................................................20
What does this mean in practice ?......................................................................................................................20
When is the acquisition date?.............................................................................................................................21
Accounting for Contingent consideration............................................................................................................21
What is part of the business combination ?........................................................................................................21
16. Recognition and measurement principles...............................................................................................................22
2 important principles.........................................................................................................................................22
How do we measure non-controlling interests?..................................................................................................22
when is the acquisition date?..............................................................................................................................22
Allocation of income and expenses.....................................................................................................................22
Acquiree’s intangible assets................................................................................................................................23
which Items are not identifiable according to the recognition principles?..........................................................23
Exceptions to the recognition and measurement principles...............................................................................23
When can a Restructuring provisions be recognized?.........................................................................................24
Which restructuring costs are included or excluded?..........................................................................................24
17. Goodwill.................................................................................................................................................................. 25
Definition.............................................................................................................................................................25
Recognition and measurement...........................................................................................................................25
Subsequent treatment of goodwill......................................................................................................................25
Calculating goodwill............................................................................................................................................25
18. Bargain purchases....................................................................................................................................................25
What is a bargain purchase.................................................................................................................................26
Reassessment......................................................................................................................................................26
EXAMPLE.............................................................................................................................................................26
19. Initial accounting determined provisionally.............................................................................................................26
General principle?...............................................................................................................................................26
The measurement period....................................................................................................................................26
Conditions for adjustment...................................................................................................................................27
Use of provisional values.....................................................................................................................................27
What can be adjusted ?.......................................................................................................................................27
Retrospective adjustments..................................................................................................................................27
Adjusted items....................................................................................................................................................27
Adjustments to unrecognized items....................................................................................................................27
EXAMPLE: Adjustments to provisional values......................................................................................................28
Deferred tax arising from a business combination..............................................................................................28
20. Business combinations achieved in stages...............................................................................................................29
Principles to be applied.......................................................................................................................................29
How do we measure goodwill (or gain from a bargain purchase)?......................................................................29
Control achieved in stages...................................................................................................................................29
21. Joint arrangements..................................................................................................................................................30
Definition of Joint Arrangements........................................................................................................................30
2
, (1)A joint operator...............................................................................................................................................31
(2)A joint venturer...............................................................................................................................................31
Overview.............................................................................................................................................................32
22. Accounting for interests in a joint operation...........................................................................................................32
Financial statements of a joint operator..............................................................................................................32
Interests in an joint operation not having joint control.......................................................................................33
23. Previously held interests..........................................................................................................................................33
24. Accounting of an interest in a joint venture.............................................................................................................33
investment..........................................................................................................................................................33
When is IAS 28 applicable ?.................................................................................................................................33
25. Associate..................................................................................................................................................................34
definitions ?.........................................................................................................................................................34
How is significant influence achieved?................................................................................................................34
26. Equity method.........................................................................................................................................................34
What ?.................................................................................................................................................................34
Exemptions of the equity method.......................................................................................................................34
27. Associates and Joint Ventures classified as held for sale.........................................................................................35
Applying IFRS 5 or IAS 28 ?..................................................................................................................................35
28. Equity method procedures......................................................................................................................................35
2 important aspects.............................................................................................................................................35
Potential voting rights when applying equity method.........................................................................................37
Summary of the equity method procedures.......................................................................................................37
29. Reduction in ownership interest..............................................................................................................................37
30. Transactions with Associates and Joint Ventures.....................................................................................................38
‘Downstream’ transactions..................................................................................................................................38
‘Upstream’ transactions......................................................................................................................................38
Contribution of assets for equity interests..........................................................................................................39
31. Reporting periods and accounting policies..............................................................................................................39
Reporting periods................................................................................................................................................39
Different accounting policies...............................................................................................................................39
32. Impairment losses...................................................................................................................................................39
Testing for impairment........................................................................................................................................39
Determining value in use.....................................................................................................................................40
Group accounting: 8/20
International accounting: 12/20
2 separate examens with 1h for group accounting
3
, 1.Introduction
Extra resources : www.deloittteifrslearning.com
USEFUL NOTATIONS
IAS = international accounting standard
IFRS = international financial reporting standards
IFRS 3 Business Combinations
IFRS 10 Consolidated Financial Statements
IFRS 11 Joint Arrangements
IFRS 12 Disclosure of Interests in Other Entities
IAS 28 Investments in Associates and Joint Ventures
KEY LEARNING OBJECTIVES:
- Explain what is meant by a set of consolidated financial statements;
- Define the terms “group”, “parent”, “subsidiary” and “control” as per IFRS 10;
- Prepare a group statement of financial position both at the date of acquisition and subsequent to
acquisition, accounting correctly for goodwill;
- Prepare a group statement of financial position in cases where subsidiaries are either wholly owned or
partly owned, dealing correctly with non-controlling interests;
- Eliminate intra-group balances and eliminate unrealized profits arising on the transfer of assets between
group companies at more than cost;
- Prepare a group statement of comprehensive income, eliminating intra-group items in accordance with the
requirements of iFRS 10;
- Account correctly for a non-controlling interest in the profits of a subsidiary;
- Prepare a group statement of comprehensive income in the situation where a parent company has acquired
a subsidiary part of the way though the accounting period;
- Define the terms ‘associate’ and ‘significant influence’ in accordance with IAS 28;
- Explain the equity method of accounting and apply this method when accounting for an investment in an
associate;
- Define the terms “joint arrangement”, “joint control” in accordance with IFRS 11;
- Distinguish between a joint operation and a joint venture;
- Account correctly for an interest in a joint operation or a joint venture
2.Requirements to prepare consolidated financial
statements
2.1. Definitions
Consolidated financial statements or group accounts are
- The financial statements of a group in which the assets, the liabilities, equity, income, expenses and cash
flows of the parent and its subsidiaries are presented as those of a single entity.
- The consolidated financial statements only contain balances and transactions with third parties.
Intercompany balances and transactions have to be eliminated
- Consolidated financial statements are often referred to as group accounts
Group is a parent and its subsidiaries
Parent is an entity that controls one or more entities
A subsidiary is an entity that is controlled by another entity
4
