企业合并5高财部分根据ifrs3Associates电子版本.ppt

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1、Session 5Associates第一页，共32页。Associates1.IAS 28 investments in associates2.Associates in the consolidated statement of financial position3.Associates in the consolidated income statement第二页，共32页。Definition of an associateIAS28 defines an associate as:An entity over which the investor has significant

2、influence and that is neither a subsidiary nor an interest in joint venture.Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.Significant influence is assumed with a share holding

3、of 20%to 50%.第三页，共32页。Principles of equity accounting and reasoning behind itEquity accounting is a method of accounting that brings an associate into the parent companys financial statements initially at cost.The carrying amount of the investment is then adjusted in each period by the group share o

4、f the profit of the associate less any impairment losses.第四页，共32页。Cont.The investment in the associate is therefore stated at:lCost pluslGroup share of retained post-acquisition profits;lesslAmounts written off(i.e.impairment losses)The effect of this is that the consolidated statement of financial

5、position includes:l100%of the assets and liabilities of the parent and subsidiary company on a line by line basislAn investments in associates line within non-current assets which includes the group share of the assets and liabilities of any associate.第五页，共32页。Cont.The consolidated income statement

6、includes:l100%of the income and expenses of the parent and subsidiary company on a line by line basislOne line share of profit of associates which includes the group share of any associates profit after taxNote that in order to equity account,the parent company must already be producing consolidated

7、 financial statements(i.e.it must already have at least one subsidiary)第六页，共32页。2 Associates in the consolidated statement of financial position lPreparing the CSFP including an associateThe CSFP is prepared on a normal line-by-line basis following the acquisition method for the parent and subsidiar

8、y.The associate is included as a non-current asset investment calculated as:$Cost of investment xShare of post acquisition profits xLess:impairment losses (x)x第七页，共32页。Cont.The group share of the associates post acquisition profits or losses and the impairment of goodwill also be included in the gro

9、up retained earnings calculation.$000Parents share of associates net assets at report date(W2)xCarrying goodwill/premium(W3)x x第八页，共32页。Standard workingThe calculations for an associate(A)can be incorporated into standard CSFP working as follows.(W1)Group structure P this indicates that:30%P owns 80

10、%of the ordinary of S 80%A S also owns 30%of the shares in A S第九页，共32页。(W2)Net assets of S:acquisition reporting date$Share capital x xRetained earnings x x x xA:acquisition reporting date$Share capital x xRetained earning x x x x 第十页，共32页。W3 Goodwill-SProportion of net assets(old method)Purchase co

11、nsideration xFor:Parents share of subs net assetsacq xGoodwill on acquisition xLess:Impairment (x)Carrying Goodwill x第十一页，共32页。Cont.Full goodwill(new method)Cost of investment XFor:Parents share of subs NAacq (X)Goodwill-parents share XF.V of NCI at acquisition XLess:NCI share of NAacq (X)Goodwill-N

12、CI share XTotal goodwill XLess impairment (x)Carrying goodwill x第十二页，共32页。W4 Non-controlling interest Old method:Parents share of subs net assets at reporting date xNew method:Parent share of subs net assets at reporting date xNCI share of Goodwill x x第十三页，共32页。W5 Group retained earningPreserve(100%

13、)xS group share of post-acquisition reserves xA group share of post-acquisition reserves xLess:Impairment losses to date (S+A)(W3)(x)x第十四页，共32页。W6 Investment in associated companyCost of investment xPost-acquisition profit(W5)xLess:impairment (x)xOr,Parents share of Associate NA reportingDate xCarry

14、ing goodwill x x第十五页，共32页。Illustrate 1 Associates in SCFPBelow are the statements of financial position of three companies as at 31 December 20 x9.第十六页，共32页。DipsyLaalaaPo$000$000$000Non-current assets:Tangible assets1,120980840Investment:672,000 shares in Laalaa644-168,000 shares in Po224-1,98898084

15、0Current assets:Inventory380640190Receivables190310100Cash3558466051,0083362,5931,9881,176Equity and liabilitiesCapital and reserves$1 ordinary shares1,120840560Retained earnings1,2326024482,3521,4421,008Current liabilities:Trade payables150480136Taxation9166322415461682,5931,9881,176第十七页，共32页。Cont.

16、You are also given the following information:1.Dipsy acquired its shares in Laalaa on 1 January 20 x9 when Laalaa had retained losses of$56,000.2.Dipsy acquired its shares in Po on 1 January 20 x9 when Po had retained earnings of$140,000.3.An impairment test at the year end shows that goodwill for L

17、aalaa remains unimpaired and the investment in Po by$2,800.4.The Dipsy Group values the non-controlling interest at full value.The fair value on 1 January 20 x9 was$157,000.Prepare the consolidated statement of financial position for the year ended 31 December 20 x9 for Dipsy and its subsidiary,inco

18、rporating its associated company in accordance with IAS28.第十八页，共32页。Fair values and the associateIf the fair value of the associates net assets at acquisition are materially different from their book value the net assets should be adjusted in the same way as for a subsidiary第十九页，共32页。Balances with t

19、he associateGenerally the associate is considered to be outside the group.Therefore balances between group companies and the associate will remain in the consolidated statement of financial position.If a group company trades with the associate,the resulting payables and receivables will remain in th

20、e consolidated statement of financial position.第二十页，共32页。Unrealised profit in inventoryAdjustment must be made for unrealised profit in inventory as follows.1.Determine the value of closing inventory which is the result of a sale to or from the associate2.Use the mark-up/margin to calculate the prof

21、it earned by the selling company3.Make the required adjustments.These will depend upon who the seller is:第二十一页，共32页。Cont.Parent company selling to associate the profit element is included in the parent companys accounts.Dr Group retained earningsCr Investment in associateAssociate selling to parent

22、company the profit element is included in the associate companys accounts.Dr Group retained earningsCr Group inventory第二十二页，共32页。3 Associates in the consolidated income statementEquity accounting:The equity method of accounting requires that the consolidated income statementlDoes not include dividen

23、ds from the associatelInstead includes group share of the associates profit after tax less any impairment of the associate in the year第二十三页，共32页。Trading with associateGenerally the associate is considered to be outside the group.Therefore any sales or purchases between group companies and the associ

24、ate are not normally eliminated and will remain part of the consolidated figures in the income statement.It is normal practice to instead adjust for the unrealised profit in inventory.第二十四页，共32页。Illustrate 2 Associates in the consolidated income statementBelow are the income statement of the barbie

25、group and its associated companies,as at 31 December 20 x8.You are also given the following information.BarbieKenShelly$000$000$000Sales revenue38510060Cost of sales(185)(60)(20)Gross profit2004040Operating expenses(50)(15)(10)Profit before tax1502530Tax(50)(12)(10)Profit after tax1001320第二十五页，共32页。

26、Cont.1.Barbie acquired 60,000 ordinary shares in Shelly for$80,000 when that company had a credit balance on its retained earnings of$50,000 a number years ago.Shelly has 200,000$1 ordinary shares.2.Barbie acquired 45,000 ordinary shares n Ken,a number of years ago,for$70,000 when retained earnings

27、were$20,000.Ken has 50,000$1 ordinary shares.3.During the year Shelly sold goods to Barbie for$28,000.:Barbie still holds some of these goods in inventory at the year end.The profit element included in the remaining goods is$2,000.4.Goodwill and the investment in the associate were impaired for the

28、first time during the year as follows:Shelly$2,000Ken$3,000impairment of the subsidiarys goodwill should be charge to operating expenses.5.Non-controlling interests are valued using the proportion of net assets nethod.Prepare the consolidated income statement for Barbie including the results of its

29、associated company.第二十六页，共32页。Dividend from associatesDividends from associates are excluded from the consolidated income statement;the group share of the associates profit is included instead.第二十七页，共32页。Test your understanding 1P acquired 80%of S on 1 December 2004 paying$4.25 in cash per share.At

30、this date the balance on Ss retained earnings were$870,000.On 1 March 2007 P acquired 30%of As ordinary shares.The consideration was settled by share exchange of 4 new shares in P for every 3 shares acquired in A.The share price in of P at the date of acquisition was$5.00.P has not yet recorded the

31、acquisition of A in its book.第二十八页，共32页。Cont.The statement of Financial Position of the three companies as at 30 November 2007 are as follows:第二十九页，共32页。Cont.P PS SA A$000$000$000Non-current assetsProperty1,300850900Plant&Equipment450210150Investments1,82500Current assetsInventory550230200Receivable

32、s300340400Cash120501404,5451,6801,790Share capital$11,800500250Share premium250800Retained earnings1,1454001,2003,1959801,450Non-current liabilities10%Loan notes5003000Current liabilitiesTrade payables520330250Income tax33070904,5451,6801,790第三十页，共32页。Cont.The following information is relevant:lAs a

33、t 1 December 2004,plant in the books of S was determined to have a fair value of$50,000 in excess of its carrying value.The plant had a remaining life of 5 years at this time.lDuring the year,S sole goods to P for$400,000 at a mark-up of 25%.P had a quarter of these goods still in inventory at the y

34、ear end.lIn September A sold goods to P for$150,000.These goods had cost A$100,000.P had$90,000(at cost to P)in inventory at the year end.第三十一页，共32页。Cont.lAs a result of the above intra-company sales,Ps books showed$50,000 and$20,000 as owing to S and A respectively at the year end.These balances ag

35、reed with the amounts recorded in Ss and As books.lNon-controlling interests are measured using the proportion of net assets method.Goodwill is to be impaired by 30%at the reporting date.An impairment review found the investment in the associate was to be impaired by$15,000 at the year end.lAs profit after tax for the year is$600,000.Requirement:Prepare the consolidated Statement of Financial Position as at 30 November 2007.第三十二页，共32页。