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About the seminar(Module 2)
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Group structure in modern businesses are complex and typically consist related entities such as ultimate parent, intermediate parents, subsidiaries, associates and jointly controlled entities.
The complexity of modern businesses had also resulted in complex accounting rules for such entities. Practicing accountants are required to exercise of professional judgement to determine the substance of the relationship of related companies in order to apply the appropriate accounting policies when preparing group financial statements. The rules are further complicated by issues of foreign operations, hyperinflations as well as subsequent changes in interests between entities such as acquisition and disposal.
The more advanced aspects of accounting for business combination and the preparation of consolidated financial statements will be examined in this two-day workshop by using extensive mini case studies to help participants to gain a sound understanding of the techniques and methodologies for complex consolidation practices. Preparation of group financial statements is dealt with under IFRS3, IAS27, IAS28, IAS31, and accounting treatments for foreign entities are covered under IAS21 and IAS29. The complex accounting issues on impairment to goodwill will be studied under IAS36. Finally, the seminar also examines current documents issued by IASB in the area of group financial statements.
Exception to recognition and measurement principles
Identifying legal/substance parent and subsidiary
Reverse consolidation procedures
Accounting for cost of business combinations: Fair value at date of exchange
Accounting for contingent considerations
Handling contingent liabilities and its subsequent measurement
Calculating goodwill and bargain purchase
Calculating non-controlling interest at date of acquisition
Deferred tax arising from:
Fair value adjustment to assets and liabilities of acquire
Unused tax losses and tax credit of acquiree
Advanced Issues in the Preparation of Consolidated Financial Statements
Accounting for subsidiaries, associates and jointly controlled entities in the separate financial statements
Identifying “control”
Treatment of minority interests
Investments in Associates:
Determining "significant influence"
Application of the equity method of accounting
Dealing with losses and associates
Complex group structures: vertical, mixed; indirect associates and associated group
Increases and decreases of interests in subsidiaries without change of control
Acquisition in stages
Disposal of subsidiaries with and without loss of control
Bonus issue and rights issue
Consolidating subsidiaries held for sale
Interpretation12 Consolidation – Special Purpose Entities
Impairment of goodwill allocated to a subsidiary
Foreign Aspects
Indentifying functional currency
Translating functional currency into presentation currency
Hedge of net investment
Consolidating foreign subsidiary
Equity accounting for foreign associates
Translating goodwill and fair value adjustments at closing rate
Foreign exchange reserve movements
Handling hyperinflation in foreign operations
Who should attend
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