PART 1 CONSOLIDATED FINANCIAL STATEMENTS
BEGAAP
1 ECONOMIC GROUPS
1.1 ECONOMIC GROUPS – EXAMPLE EURONAV
EURONAV -BE 0860.402.767 (now: CMB.TECH)
Activity : https://www.euronav.com/en/
Euronext : https://www.euronext.com/nl/products/equities/BE0003816338-XBRU/quotes
Based on what information investors decide to buy or sell
shares from a company?
Investors will buy or sell shares 1 based on their estimation of
the value of a share.
o they will use the annual accounts to estimate the
value of a share, through ratios such as: past
dividend policy, profitability ratios, solvency ratios,
…
But, what if an enterprise organizes its activities through a
multitude of companies?
o just add up all the annual accounts of these
companies?... = NO
1.2 WHY LEGISLATION (LAW-MAKING) FOR FINANCIAL REPORTING?
Management accounting Internal Reporting
Internal use : used by management themselves, to support management in management
decision making, planning…
Detailed and disaggregated information about products, divisions, plants, operations, tasks,
individual activities,…
Confidential information
Primarily forward-looking
Computed (berekend) by reference to (op basis van) the needs of managers (tailored to their own
needs)
Financial accounting Annual Accounts (dubbel boekhouden)
Information for external stakeholders such as shareholders, creditors, public regulators,
suppliers, …
Focus on the company as a whole
Made available for public use
Historical information
Computed by reference to general financial accounting standards
Financial reporting = information towards external stakeholders:
Shareholders, employees, customers, suppliers, government …
External stakeholders need to understand the information provided
o need for accounting standards (legislation) to provide a frame of reference to interpret
and understand the information provided
Statutory annual accounts = Information towards external stakeholders about:
Solvency (equity/liabilities, …)
Liquidity (cashflow, working capital, …)
Profitability (earnings per share, …)
…
of the legal entity (rechtspersoon) (VB: Plc, LLC, dutch : NV, BV, …)!
Provides insufficient information for economic groups : activities and assets to deploy
the economic activities are spread over multiple legal entities
o solvency, liquidity, profitability of the legal entities doesn’t provide a clear view on
profitability, … of the total economic activity…
1
Shares = units of equity ownership interest in a corporation that provide for an equal distribution in
any profit in the form of dividends.
, Consolidated financial statements : economic entity!
Consolidated Financial Statements = the financial statements of a group in which the assets,
liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries are presented as
those of a single economic entity.
Profitability, solvency, liquidity, … of the economic entity.
Consolidated Financial Statements provide a true and fair view of assets, financial position
and the results of the group.
1.3 ANNUAL ACCOUNTS : INVESTMENTS IN EQUITY INSTRUMENTS PURPOSE?
1.3.1 WHERE CAN WE FIND INVESTMENTS IN EQUITY INSTRUMENTS (EQUITY INVESTMENTS,
OR THE ACQUIRING OF SHARES OF OTHER COMPANIES = ASSETS) IN THE ANNUAL
ACCOUNTS?
51 – part of the working capital
Short term investments of (temporary) cash surplus – sold within the time span of a year.
28 (~0/2/4) – classified as non-current assets (Dutch: financiële vaste activa)
Non-current assets : Resources that are not expected to be consumed or sold within the normal
operating cycle. Non-current assets are acquired by a company to realize its goals in the long term.
Investment in equity instruments (shares) = non-current assets (= financiële vaste activa)
1.3.2 INSIGHTS BY MEANS OF AN EXAMPLE
BEGAAP
1 ECONOMIC GROUPS
1.1 ECONOMIC GROUPS – EXAMPLE EURONAV
EURONAV -BE 0860.402.767 (now: CMB.TECH)
Activity : https://www.euronav.com/en/
Euronext : https://www.euronext.com/nl/products/equities/BE0003816338-XBRU/quotes
Based on what information investors decide to buy or sell
shares from a company?
Investors will buy or sell shares 1 based on their estimation of
the value of a share.
o they will use the annual accounts to estimate the
value of a share, through ratios such as: past
dividend policy, profitability ratios, solvency ratios,
…
But, what if an enterprise organizes its activities through a
multitude of companies?
o just add up all the annual accounts of these
companies?... = NO
1.2 WHY LEGISLATION (LAW-MAKING) FOR FINANCIAL REPORTING?
Management accounting Internal Reporting
Internal use : used by management themselves, to support management in management
decision making, planning…
Detailed and disaggregated information about products, divisions, plants, operations, tasks,
individual activities,…
Confidential information
Primarily forward-looking
Computed (berekend) by reference to (op basis van) the needs of managers (tailored to their own
needs)
Financial accounting Annual Accounts (dubbel boekhouden)
Information for external stakeholders such as shareholders, creditors, public regulators,
suppliers, …
Focus on the company as a whole
Made available for public use
Historical information
Computed by reference to general financial accounting standards
Financial reporting = information towards external stakeholders:
Shareholders, employees, customers, suppliers, government …
External stakeholders need to understand the information provided
o need for accounting standards (legislation) to provide a frame of reference to interpret
and understand the information provided
Statutory annual accounts = Information towards external stakeholders about:
Solvency (equity/liabilities, …)
Liquidity (cashflow, working capital, …)
Profitability (earnings per share, …)
…
of the legal entity (rechtspersoon) (VB: Plc, LLC, dutch : NV, BV, …)!
Provides insufficient information for economic groups : activities and assets to deploy
the economic activities are spread over multiple legal entities
o solvency, liquidity, profitability of the legal entities doesn’t provide a clear view on
profitability, … of the total economic activity…
1
Shares = units of equity ownership interest in a corporation that provide for an equal distribution in
any profit in the form of dividends.
, Consolidated financial statements : economic entity!
Consolidated Financial Statements = the financial statements of a group in which the assets,
liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries are presented as
those of a single economic entity.
Profitability, solvency, liquidity, … of the economic entity.
Consolidated Financial Statements provide a true and fair view of assets, financial position
and the results of the group.
1.3 ANNUAL ACCOUNTS : INVESTMENTS IN EQUITY INSTRUMENTS PURPOSE?
1.3.1 WHERE CAN WE FIND INVESTMENTS IN EQUITY INSTRUMENTS (EQUITY INVESTMENTS,
OR THE ACQUIRING OF SHARES OF OTHER COMPANIES = ASSETS) IN THE ANNUAL
ACCOUNTS?
51 – part of the working capital
Short term investments of (temporary) cash surplus – sold within the time span of a year.
28 (~0/2/4) – classified as non-current assets (Dutch: financiële vaste activa)
Non-current assets : Resources that are not expected to be consumed or sold within the normal
operating cycle. Non-current assets are acquired by a company to realize its goals in the long term.
Investment in equity instruments (shares) = non-current assets (= financiële vaste activa)
1.3.2 INSIGHTS BY MEANS OF AN EXAMPLE
