[et_pb_section bb_built=”1″ admin_label=”Header – All Pages” transparent_background=”off” background_color=”#1e73be” allow_player_pause=”off” inner_shadow=”off” parallax=”off” parallax_method=”off” make_fullwidth=”off” use_custom_width=”off” width_unit=”on” make_equal=”off” use_custom_gutter=”off” custom_padding=”0px||0px|” next_background_color=”#000000″ custom_padding_tablet=”50px|0|50px|0″ custom_padding_last_edited=”on|desktop” global_module=”1221″][et_pb_row admin_label=”row” global_parent=”1221″ make_fullwidth=”off” use_custom_width=”off” width_unit=”on” use_custom_gutter=”off” custom_padding=”||5px|” allow_player_pause=”off” parallax=”off” parallax_method=”on” make_equal=”off” parallax_1=”off” parallax_method_1=”off” background_position=”top_left” background_repeat=”repeat” background_size=”initial”][et_pb_column type=”4_4″][et_pb_post_title global_parent=”1221″ title=”on” meta=”off” author=”on” date=”on” categories=”on” comments=”on” featured_image=”off” featured_placement=”below” parallax_effect=”on” parallax_method=”on” text_orientation=”left” text_color=”light” text_background=”off” text_bg_color=”rgba(255,255,255,0.9)” module_bg_color=”rgba(255,255,255,0)” use_border_color=”off” border_color=”#ffffff” border_style=”solid” custom_padding=”10px|||” parallax=”on” background_color=”rgba(255,255,255,0)” /][/et_pb_column][/et_pb_row][/et_pb_section][et_pb_section bb_built=”1″ fullwidth=”off” specialty=”off” transparent_background=”off” allow_player_pause=”off” inner_shadow=”off” parallax=”off” parallax_method=”off” custom_padding=”30px||0px|” make_fullwidth=”off” use_custom_width=”off” width_unit=”on” make_equal=”off” use_custom_gutter=”off” background_color=”#1e73be” prev_background_color=”#000000″ next_background_color=”#ffffff” custom_padding_tablet=”0px||0px|” global_module=”1228″][et_pb_row global_parent=”1228″ make_fullwidth=”off” use_custom_width=”off” width_unit=”on” use_custom_gutter=”off” custom_padding=”30px||0px|” allow_player_pause=”off” parallax=”off” parallax_method=”off” make_equal=”off” parallax_1=”off” parallax_method_1=”off” column_padding_mobile=”on” background_position=”top_left” background_repeat=”repeat” background_size=”initial”][et_pb_column type=”4_4″][et_pb_text global_parent=”1228″ background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid” background_position=”top_left” background_repeat=”repeat” background_size=”initial”] [breadcrumb] [/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section][et_pb_section bb_built=”1″ fullwidth=”off” specialty=”off” transparent_background=”off” allow_player_pause=”off” inner_shadow=”off” parallax=”off” parallax_method=”off” padding_mobile=”off” make_fullwidth=”off” use_custom_width=”off” width_unit=”on” make_equal=”off” use_custom_gutter=”off” gutter_width=”3″ custom_padding_tablet=”0px||0px|” custom_padding_last_edited=”on|desktop” prev_background_color=”#1e73be” next_background_color=”#000000″][et_pb_row][et_pb_column type=”4_4″][et_pb_toggle admin_label=”Index” _builder_version=”3.0.106″ title=”Index” open=”off”]
Contents
14.2.1 Extract from FRS102: Section 14.2-14.3.
14.2.2.1 What forms of entities can be considered an associate.
14.2.2.2 Significant influence (the ability to assert the influence even if it is not asserted)
14.2.2.2.1 Requirements to consider potential voting rights where reviewing significant influence.
14.2.2.2.2 How is significant influence demonstrated.
14.2.2.2.3 When can the 20% or more holdings be rebutted – significant influence.
14.2.2.2.4 Consideration when slightly less than 20% held.
14.3 Measurement—accounting policy election.
14.3.1 Extract from FRS102: Section 14.4-14.4B.
14.4.1 Extract from FRS102: Section 14.5-14.6.
14.4.2.3 Deferred tax under the cost model
14.4.2.4 Illustration of the cost model
14.4.2.5 Recognition of Income.
14.5.1 Extract from FRS102: Section 14.8(a)-18.8(h)
14.5.2.2 Application of equity accounting.
14.5.2.2.2 Worked example illustrating equity accounting requirements.
14.5.2.4 Transactions with associates.
14.5.2.5 Date of associates financial statements.
14.5.2.6 Uniform Accounting policies
14.5.2.7 Losses in excess of investment
14.5.2.8 Deferred tax on unremitted earning in the consolidated financial statements.
14.5.2.8.2 Timing difference to reverse through sale.
14.5.2.8.3 Timing difference to reverse through receipt of dividends.
14.5.2.8.4 Example of deferred tax on unremitted earnings.
14.6 Discontinuing the equity method.
14.6.1 Extract from FRS102: Section 14.8(i)
14.6.2.2.1 Full derecognition of associate due to sale.
14.6.2.2.3 Transfer of associate as a result of loss of significant influence due to sale.
14.6.2.2.4 Loss of significant influence not due to sale.
14.7 Initial carrying amount of an associate following loss of control of an entity.
14.8 Step increase in an existing associate.
14.9 Step increase from investment/financial asset to associate.
14.10.1 Extract from FRS102: Section 14.9-14.10A.
14.10.2.1 Fair value through other comprehensive income (OCI)
14.10.2.1.1 Measurement and recognition.
14.10.2.1.2 Treatment of transaction costs.
14.10.2.1.3 Frequency of valuations.
14.10.2.1.4 What happens when fair value cannot be measured reliably.
14.10.2.1.6 Example of application of Fair Value through Other Comprehensive Income model
14.10.2.1.7 Recognition of income.
14.10.2.2 Fair value through the profit and loss.
14.10.2.2.1 Measurement and recognition.
14.10.2.2.2 Frequency of valuations.
14.10.2.2.3 What happens when fair value cannot be measured reliably?.
14.10.2.2.4 Example of application of Fair Value through profit and loss model
14.11 Disclosure requirements.
14.11.1 Extract from FRS102: Section 14.11-14.15A.
14.11.2.2.2 Consolidated financial statements.
14.11.2.2.2.1 Accounting policies – consolidated financial statements.
14.11.2.2.2.2 Notes to the financial statements.
14.11.2.2.2.2.1 Financial assets.
14.11.2.2.2.3 Consolidated profit and loss amount showing share of associates.
14.11.2.2.3 Parent entity financial statements.
14.11.2.2.3.1 Accounting policies.
14.11.2.2.3.2 Notes for the financial statements.
14.11.2.2.3.2.1 Financial assets.
14.11.2.2.3.3 Profit and loss accounts for entity that is not a parent
[/et_pb_toggle][/et_pb_column][/et_pb_row][et_pb_row][et_pb_column type=”3_4″][et_pb_text admin_label=”Main Body Text” background_layout=”light” text_orientation=”justified” use_border_color=”off” border_color_all=”off” module_alignment=”left” _builder_version=”3.0.106″]
14.1 Scope
Section 14 provides the definition of an associate and the rules in accounting for an associate to include the disclosure requirements in the consolidated and individual financial statements.
[/et_pb_text][/et_pb_column][et_pb_column type=”1_4″][et_pb_toggle _builder_version=”3.0.106″ title=”Practical Examples” open=”off”]
Examples
Example 1: Potential voting rights.
Example 2: Potential voting rights.
Example 4: Dividend paid out of pre-acquisition reserves.
Example 5: Equity method accounting.
Example 6: Elimination of profit where investor sells goods to investee.
Example 7: loss in excess of investment
Example 8: Deferred tax on enremitted earnings
Example 9: Full derecognition of associate due to sale.
Example 10: Partial derecognition of associate due to sale but significant influence still retained.
Example 11: Transfer of associate as a result of loss of significant influence due to sale.
Example 12: Loss of significant influence not due to sale.
Example 14: Step increase in an existing associate.
Example 15: Step increase from investment /financial asset to associate.
Example 16: Adoption of fair value through other comprehensive income.
Example 17: Adoption of fair value through profit and loss.
Example 18: Extract from the accounting policy notes to the consolidated financial statements.
[/et_pb_toggle][/et_pb_column][/et_pb_row][/et_pb_section]