Professional Documents
Culture Documents
Business Combinations
Business Combinations
Accounting for
business combinations
and consolidated
financial statements
Joint World Bank and IFRS Foundation ‘train the
trainers’ workshop hosted by the ECCB,
30 April to 4 May 2012
Control
IFRS 10 Consolidated Financial Statements
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The views expressed in this presentation are those of the
presenter,
not necessarily those of the IASB or IFRS Foundation
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Objective 3
• Information about
• resources under the control of the group (assets)
and
• claims against those resources
assists users to better assess the prospects for future
net cash inflows to the group which is useful in making
decisions about providing resources to the group.
• The global financial crisis highlighted the importance of
enhancing disclosure requirements, in particular for
special purpose or structured entities.
IFRS 3
Business Combinations
[[[
The views expressed in this presentation are those of the
presenter,
not necessarily those of the IASB or IFRS Foundation
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Introduction 18
• Reacquired rights
• measured at fair value based on remaining
contractual term ignoring the fair value effect of
renewal
• Share-based payment transactions
• replacement awards: measured in accordance with
IFRS 2
• Assets held for sale
• measured in accordance with IFRS 5 (ie fair value
less costs to sell)
• Income taxes
• deferred tax assets or liabilities arising from acquired
assets or liabilities accounted for using IAS 12
• Employee benefits
• accounted for using IAS 19
• Indemnification assets
• may not be recognised at fair value if it relates to an
item not recognised or measured in accordance with
IFRS 3
IFRS 10
Consolidated Financial
Statements
[[[
The views expressed in this presentation are those of the
presenter,
not necessarily those of the IASB or IFRS Foundation
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Effective Date 35
Profit or loss 20
Property, plant & equipment 20
Eliminate Investment
• Proforma journal entry at acquisition is:
Profit or loss 20
Property, plant & equipment 20
Allocate profit
• Proforma journal entry allocating the NCI their share of
B’s profit for the year:
Calculation:
Profit 400
Depreciation adjust (20)
380
25% attributable to NCI 95
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Example:
NCI continued 48
NCI (equity) 5
NCI profit allocation 5
IFRS 12
Disclosure of Interests in
Other Entities
[[[
The views expressed in this presentation are those of the
presenter,
not necessarily those of the IASB or IFRS Foundation
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Introduction 53
57
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Unconsolidated structured entities 58
© 2011
© IFRS Foundation | 30 Cannon
IFRS Foundation | 30Street | London
Cannon EC4M
Street 6XH | EC4M
| London UK. www.ifrs.org
6XH | UK | www.ifrs.org