All right! I think we are almost there. Just a few more smaller topics to cover. Today, we will cover on “Tax effect on unrealised intragroup profits and losses” and “Intragroup dividends” Without further delay, let’s jump straight into first topic. Tax effect on unrealised intragroup profits and losses We have discussed FRS 12 beforeContinue reading “9: Consolidation (Subq. to Acq Date) Part V”
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8: Consolidation (Subq. to Acq Date) Part IV
Phew! Last post was lengthy isn’t it? 🙂 Today, we will cover on “Intragroup sale of depreciable assets” and “Intragroup charges” Without further delay, let’s jump straight into first topic. Intragroup sale of depreciable assets This topic is complicated in the sense that subsequent depreciation is treated as gradual realisation of unrealised profit (URP). ThisContinue reading “8: Consolidation (Subq. to Acq Date) Part IV”
7: Consolidation (Subq. to Acq Date) Part III
As per previous post, consolidation subsequent to acquisition date has a few topics, Today, we will cover on “Intragroup sale of non-depreciable assets” and “Intragroup sale of stock” Before we begin however, I thought perhaps it will be good to recap some important lessons from previous learnings: The objective of consolidation is not just toContinue reading “7: Consolidation (Subq. to Acq Date) Part III”
6: Consolidation (Subq. to Acq Date) Part II
As per previous post, consolidation subsequent to acquisition date has a few topics, mainly: Consolidated Statement of Comprehensive Income Pre and Post acquisition reserves Intragroup account balances Unrealised Intragroup Profits and Losses Intragroup sale of non-depreciable assets Intragroup sale of stock Intragroup sale of depreciable assets Intragroup charges Tax effect on intragroup profits and lossesContinue reading “6: Consolidation (Subq. to Acq Date) Part II”
5: Consolidation (Subq. to Acq Date) Part I
We have concluded on our requirements for consolidation, which can be summarised as follow: Recognizing COI, Cash or Equity transferred at legal entity level Determination of power and control Fair value adjustments and its deferred tax implications Calculation of Goodwill and NCI All of the above are balance sheet focused since any profits before acquisitionContinue reading “5: Consolidation (Subq. to Acq Date) Part I”
4: Fair Value Adjustments (Date of Acq.) Part II
To recall the learnings in my immediate prior post, there are 4 main elements for consolidation at date of acquisition: Basic combination of financial statements Adjustments for the fair values of assets and liabilities Goodwill – Balance of cost of investment less fair value (FV) of net identifiable assets Non-controlling interest (NCI) For the purposeContinue reading “4: Fair Value Adjustments (Date of Acq.) Part II”
1: Consolidation Introduction
Conditions for consolidation As per FRS110, a parent with control over subsidiaries is required to present a consolidated financial statement. However, as we will soon find out, neither the concept of “control” nor the requirement to consolidate is always straightforward. To summarize paragraph 4(a) of FRS 110, all following conditions must be fulfilled in orderContinue reading “1: Consolidation Introduction”
2: Control
Definition “Control” is defined by FRS 110 by the following: “Power” over the investee Entitled to “Returns” from involvement with investee Ability to influence “Returns” from investee through its “Power” As a supplement to above, it maybe helpful to consider the design and nature of the investee as well as its relevant activities and howContinue reading “2: Control”
3: Fair Value Adjustments (Date of Acq.)
Date of acquisition is the single most important date of consolidation. It is the date where: acquirer obtains control all assets and liabilities acquired are fair valued consolidations of results initiates, which also directly determines which financial year the acquisition sits in Elements of consolidation There are 4 main elements for consolidation at date ofContinue reading “3: Fair Value Adjustments (Date of Acq.)”
Derrick How 