Table Of Content

Trim: 187 x 235 mm ffirs.indd 02/23/2015 07:15:52:AM Page ii Trim: 187 x 235 mm ffirs.indd 02/23/2015 07:15:52:AM Page i Principles of Group Accounting under IFRS Trim: 187 x 235 mm ffirs.indd 02/23/2015 07:15:52:AM Page ii Trim: 187 x 235 mm ffirs.indd 02/23/2015 07:15:52:AM Page iii Principles of Group Accounting under IFRS by Andreas Krimpmann Trim: 187 x 235 mm ffirs.indd 02/23/2015 07:15:52:AM Page iv This edition first published 2015 © 2015 John Wiley & Sons, Ltd Registered office John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ, United Kingdom For details of our global editorial offices, for customer services and for information about how to apply for permission to reuse the copyright material in this book please visit our website at www. wiley.com. The right of the author to be identified as the author of this work has been asserted in accordance with the Copyright, Designs and Patents Act 1988. All rights reserved. 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The publisher is not associated with any product or vendor mentioned in this book. Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. It is sold on the understanding that the publisher is not engaged in rendering professional services and neither the publisher nor the author shall be liable for damages arising herefrom. If professional advice or other expert assistance is required, the services of a competent professional should be sought. Library of Congress Cataloging-in-Publication Data Krimpmann, Andreas, 1963- Principles of group accounting under IFRS / by Andreas Krimpmann. pages cm Includes bibliographical references and index. ISBN 978-1-118-75141-1 (pbk.) 1. Accounting--Standards. 2. Financial statements, Consolidated. I. Title. HF5626.K75 2015 657--dc23 2014046087 Cover Design & Image: Wiley Set in 11/12.3pt, Times New Roman MT Std by Laserwords Private Ltd, Chennai, India Printed in Great Britain by TJ International Ltd, Padstow, Cornwall, UK Trim: 187 x 235 mm ffirs.indd 02/23/2015 07:15:52:AM Page v To my family Trim: 187 x 235 mm ftoc.indd 02/26/2015 04:39:8:PM Page vii Contents List of figures xvii List of tables xxiii Preface xxvii Introduction to the book xxix A The case study 1 1. About the group 2 2. Allocation of examples 4 B Legal requirements for consolidated financial statements 9 1. IFRS standards 10 1.1. Transition to the new consolidation suite (IFRS 10 to IFRS 12, IAS 27 and IAS 28) from IAS 27 rev. 2008 13 1.2. Dependencies between IFRS 3 and IFRS 10 22 1.3. Accounting transition of joint ventures 23 2. Exemptions 35 3. Local accounting standards 38 4. Taxation 39 5. Definitions 41 C Definition of Groups 43 1. The control concept 44 2. Joint control 55 3. Loss of control 61 4. Group compositions 65 5. Special cases 68 5.1. Structured entities 68 5.2. Limited partnerships 70 5.3. Deemed separate entities 71 D Preparation of Consolidated Financial Statements and Annual Reports 73 1. Lifecycle of subsidiaries 74 2. Structures 78 2.1. Accounting in group structures 78 2.2. Shared services 80 vii Trim: 187 x 235 mm ftoc.indd 02/26/2015 04:39:8:PM Page viii viii Contents 2.3. Accounting structures 83 2.4. Reporting structures 92 3. The preparation process 98 3.1. Communication 102 3.2. Subsidiaries 103 3.3. Reporting 106 3.4. The parent 107 3.5. The group 107 4. Organization 110 E Initial consolidation 113 1. Basics 114 1.1. Valuation levels 116 1.2. The opening balance sheet 119 2. Mergers and acquisitions 128 2.1. The acquirer’s view 130 2.2. The group’s view 132 3. Purchase price allocation 136 3.1. The acquirer 138 3.2. The acquisition date 140 3.3. Consideration transferred (purchase price) 143 3.4. Acquired assets – recognition and measurement 152 3.4.1. General requirements on recognition and measurement 152 3.4.2 Existing assets and liabilities 158 3.4.3. Non-accounted assets and liabilities 161 3.5. Goodwill and non-controlling interests 182 3.6. Business vs. assets and liabilities 190 4 Other aspects of purchase price allocations 193 4.1 Cash flow statements 193 4.2 Disclosures 194 5. Consolidation techniques 197 5.1. The parent’s view 198 5.2. The group’s view 202 5.2.1. Step one – preparation for consolidation 203