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GROUPS pt.2 (CH.6 ADJ's & SUNDRY ASPECTS (PREF SHARES (if…
GROUPS pt.2
CH.6
ADJ's & SUNDRY ASPECTS
LOSSES OF A SUB
Post-acqui losses
allocated to parent & NCI; consol not affected
ex 6.13 pg 370
if loss affect's P's investment in S,
recog in P's separate financials if FV
decrease relates to previous P/L gain or
OCI gain
do proforma for impairment before MEJ etc
DR Investment in S
CR Impairment to investment (P/L)
3.Ass Loss @ acqui
part of analysis in "@ acqui" and "since acqui" calc
DR Def Tax (SFP)
CR Inc tax exp
*recog before MEJ etc.
Losses @ acqui
just a -ve aspect in interest of sub
consol not affected
ex 6.12 pg 367
INSOLVENT SUB
Insolvent @ acqui
post-acqui profits usually distributable
P must reverse its tx's before incl S's actual
loss in consolidate F/S
accum loss goes into analysis
DR investment in S
CR impairment loss
*reverse impairment before MEJ etc.
DR impairment to GW
CR GW
*recog impairment @ the end
ex 6.15 pg380
Insolvent after acqui
disclose FV of (A)s & (L)s ito IFRS 5
consol will be @ GC basis unless P can prove
otherwise
if likely to be abandoned, S's books to be
@ liquidation basis
ex 6.16 pg 385
PREF SHARES
if entitled to repmt of investment
on liquidation
measure @ FV
if entitled to proportionate share of
(A)s available on liquidation
measure @ FV or Proportionate Share
ex 6.17 -19, pg 393
*have 1 analysis for Ord Shares, and 1 for Pref Shares
ex 6.20 pg 398
*NCI has interest in Pref Shares
TREATMENT OF PREF DIV
2.Accrued pref div on acquisition
of pref shares
pg 421
1.Pref Div outstanding @ YE
pg 414-420
CH.8 INTERIM ACQUISITION
1.Allocating Inc + Exp
pg 521
Gs/Ls accrue @ definite time
other items accrue @ diff rates
in respective periods
some items accrue day to day
2.Allocating in OCI
FV adj's - @ beg or end
Reval surplus - same as above
3.Allocating SCE items
Pref Div - time basis
Ord Div - @ declaration
YE items - post acqui period
adj to prev years - pre acqui period
Presentation of Consol F/S
Methods
(1) only post-profits included
(2) include both pre and post profits
*method 1 more theoretically accurate
Consol Process
Current Yr profits
post-profits
Equity @ acqui consists
share capital
RE
pre-profits
ex in chapter 8 :)
CH.11 ASSOCIATES
P sells to A
P has Inc, A has PPE
Dr Inc
Cr Inv in A
Dr Inv in A
Cr Dep
Dr Inc tax exp
Cr Inv in A
A sells to P
A has Inc and P has PPE
Dr Share in prof
Cr PPE
Dr Acc dep
Cr Share in prof
Dr Share in prof
Cr Def tax
don't account for GW, as it is part of CA
BUT, do account for GoBP
only account for your share in profit/OCI in Associate