Monthly Archives: August 2010


By: Mladek

If company A has a subsidiary b and no goodwill, that means company A, sometime in the past, acquired what was then an independent company b (or possibly a “division” b that used to belong to some other company). That was then. Now, as far as I...

By |August 30th, 2010|DOCUMENTS|Comments Off on By: Mladek

By: patriciawalters

If C is an external business not under common control of P: (1) S acquires AND controls C and compensation transferred exceeds the fair value of the identifiable assets and liabilities acquired, then S recognizes goodwill (GW) as an asset which will become part of the GW reported by P in the consolidated financial statements. The acquisition is accounted for under IFRS 3 (2008). (2) If C is an entity under common control of P, such transactions are scoped out of IFRS 3. Accounting for common control transactions were added as a research project to the board's agenda in 2007. I personally don't see their addressing this until after the convergence projects are completed. However, it does not seem reasonable to me to create a new asset simply by rearranging the various parts of P. Remember, in consolidation, the assets and liabilities of the subsidiaries (after elimination of intercompany transactions and balances) are what appear in the consolidated financial statements plus the equity accounts of the parent and any resulting minority interests. The equity accounts of the subsidiaries are eliminated as they are only the assets - liabilities. Finding specific paragraph citations is an extremely time-consuming task. I will leave that to you. IFRS 3 appendix B does include guidance on determining whether the transaction is a common control transaction. Patricia Walters

By |August 29th, 2010|DOCUMENTS|Comments Off on By: patriciawalters

By: yahya mohamed

Dear patriciawalters Can you help me and tell me both cases and under which paragraph of which IFRS And thanks

By |August 28th, 2010|DOCUMENTS|Comments Off on By: yahya mohamed

By: patriciawalters

Here is what I understand from your description. Parent company P acquires controlled subsidiary S either paying exactly the fair value of the assets and liabilities acquired or paying less and recording a gain on a bargain purchase. Either way no Goodwill was recognized on acquisition of S1. Next, you have S "merging" with another company C. "Merging" has no meaning in IFRS so we need to understand what the transaction really was and will likely depend on whether C is also controlled by P or not. So, I cannot address your question without the following information. (1) Is C another subsidiary of P or an entity that is not under the common control of P? (2) Did S acquire C or did C acquire some percentage of S? The issue is whether P still controls S and/or the new entity S+C. When you respond, I'll try to help. Regards Patricia Walters

By |August 27th, 2010|DOCUMENTS|Comments Off on By: patriciawalters

By: Mladek

Are you sure you are trying to apply IFRS? Seems to me the issues you are concerned about have more to do with legislated ("national GAAP") standards than IFRS. Under IFRS goodwill arises only when one business purchases another business. It is the difference between the purchase price and the fair value of the acquired business's net assets (assuming the former is greater). Based on your description, it does not seem an acquisition (as understood by IFRS) occurred and thus no goodwill can be recognized.

By |August 27th, 2010|DOCUMENTS|Comments Off on By: Mladek

Consolidation After Merge

If  company (A) has a subsidiary(b) during acquisition no goodwill was recognized  then the subsidiary (b) was merged with another company resulted for change it's capital structure , so the Investment of (A) at (b) is now greater than it's share of  new capital of (b) is the difference recognized as goodwill or what please Help


By: ifrslist

Conslidation After Merge -

By |August 27th, 2010|DOCUMENTS|Comments Off on By: ifrslist

IFRS Updates 2010: IFRS List 10% Discount – London + Zurich

IFRS 2010 Update A step-by-step guide through the complexities of IFRS and all the latest developments from one of the key figures in the industry London: September 21st – 22nd, 2010 and November 16th – 17th, 2010 Zurich: December 8th –9th 20...

By |August 23rd, 2010|DOCUMENTS, EVENTS, TRAINING|1 Comment

IFRS Classification in Income Statement

If a project is directly related to the project i.e software maintenance & development. How do I tag it in the income statement. Is it alright to say " project implementation cost'

By |August 23rd, 2010|OTHER IFRS|2 Comments

Minority Interst

Do I still need to account for a 1% minority interest? Are receivable from shareholders (part of share capital) eliminated in consolidation or not.

By |August 22nd, 2010|BUSINESS COMBINATION|5 Comments

Financial Statement Consolidation

If the subsidiary was established prior to the parent company, what are the possible complications? I.e. because the Holdings require higher initial capital the management decided that once the subsidiary generates revenue. the revenue can be use to fund the share capital of the parent. On the establishment of the subsidiary the shareholders put more [...]


Acquisition – Business Combination

How do i record an acquisition without investment made by the parent to the subsidiary?

By |August 19th, 2010|BUSINESS COMBINATION|4 Comments

IFRS for Insurers: Save up to £1050 plus an extra IFRS List 10% Discount

This year’s ‘Practitioners Forum on IFRS for Insurers’ explores how new financial reporting requirements will impact preparers of insurance company accounts over the coming months. The 2010 Practitioners’ Forum on IFRS for Insurers Impleme...

By |August 17th, 2010|DOCUMENTS, EVENTS, TRAINING|1 Comment

Revaluation of Leasehold land

We have land on 99 years lease. Unexpired lease is 60 years. we revalued land in 2005 and created revaluation reserve. Same auditor is signing the annual accounts since 2005. This year, auditors say that we have to reverse the reavaluation part saying that as per IFRS, revaluation of leasehold land is not possible

By |August 16th, 2010|OTHER IFRS|10 Comments

COS in intirim statements

I ran into a situation where a company takes a physical inventory (serially manufactured products) annually. In its  interim statements, it would like to omit the change in inventory from its cost of sales calculation (since including it would require a physical inventory in the interim). Assuming it publishes condensed interim statements, would this be [...]

By |August 15th, 2010|OTHER IFRS|8 Comments

Capitalization of internally developed software

My company develops software for internal use (although it could also be sold to other similar companies). It almost always replaces the software we purchased at earlier time, so it generates visible economic benefits by reducing costs. Can we capitalize our internally developed software?

By |August 12th, 2010|IAS 38|11 Comments

Realized exchange – or Revaluation differences?

Dear All, We run a SAP system with a company in EUR as Local currency and USD as reporting currency. When we book a 100 EUR invoice automatically SAP books it based on the system rate as f.e.150 USD in the reporting currency. Sofar everthing is in order. When we pay the 100 EUR from [...]

By |August 11th, 2010|CONSOLIDATION|4 Comments

By: Mladek

Thanks for your answer. But it's not exactly my problem. I have a client considering a transition to IFRS (from a continental national GAAP). Unfortunately, he noticed that IAS 2.21 states: Techniques for the measurement of the cost of inventories, such as the standard cost method or the retail method, may be used for convenience if the results approximate cost. Since he currently uses standard costs, he wants to interpret this in a way that will allow him to use standard costs in his IFRS report. What I was looking for was a realistic example of the adjustments that would have to be made (every period) to make this method IFRS complaint (and, hopefully, get him to change his mind). If I could find such an example on the internet, it would simply make my life a bit easier.

By |August 10th, 2010|DOCUMENTS|Comments Off on By: Mladek

By: sayutining wuri

I don’t really clear what is the question. May you re-announce and re-elaborate your question please. It will about the definition, accounting treatment, or else?

By |August 10th, 2010|DOCUMENTS|Comments Off on By: sayutining wuri

By: patriciawalters

I'm not sure if I was clear above. If you are keeping information about the variance between standard costs and actual costs in debit or credit balance accounts (that do not meet the definition of an asset or a liability) in your information system, These temporary accounts would always be closed to inventory at the end of the fiscal year. Under some GAAPs, you could retain the debit or credit balance accounts for the variances on your balance sheet when you prepared interim statements. Under IFRS, you must also close these accounts to inventory for interims. Patricia Walters

By |August 9th, 2010|DOCUMENTS|Comments Off on By: patriciawalters