«AASB Standard AASB 10 August 2011 Consolidated Financial Statements Obtaining a Copy of this Accounting Standard This Standard is available on the ...»
B90 In some circumstances an entity has, in substance, an existing ownership interest as a result of a transaction that currently gives the entity access to the returns associated with an ownership interest. In such circumstances, the proportion allocated to the parent and noncontrolling interests in preparing consolidated financial statements is determined by taking into account the eventual exercise of those potential voting rights and other derivatives that currently give the entity access to the returns.
B91 AASB9 does not apply to interests in subsidiaries that are consolidated.
When instruments containing potential voting rights in substance currently give access to the returns associated with an ownership interest in a subsidiary, the instruments are not subject to the requirements of AASB 9. In all other cases, instruments containing potential voting rights in a subsidiary are accounted for in accordance with AASB 9.
Reporting date B92 The financial statements of the parent and its subsidiaries used in the preparation of the consolidated financial statements shall have the same reporting date. When the end of the reporting period of the parent is different from that of a subsidiary, the subsidiary prepares, for consolidation purposes, additional financial information as of the same date as the financial statements of the parent to enable the parent to consolidate the financial information of the subsidiary, unless it is impracticable to do so.
B93 If it is impracticable to do so, the parent shall consolidate the financial information of the subsidiary using the most recent financial statements of the subsidiary adjusted for the effects of significant transactions or events that occur between the date of those financial statements and the date of the consolidated financial statements. In any case, the difference between the date of the subsidiary’s financial statements and that of the consolidated financial statements shall be no more than three months, and the length of the reporting periods and any AASB 10 APPENDIX B difference between the dates of the financial statements shall be the same from period to period.
Non-controlling interests B94 An entity shall attribute the profit or loss and each component of other comprehensive income to the owners of the parent and to the noncontrolling interests. The entity shall also attribute total comprehensive income to the owners of the parent and to the noncontrolling interests even if this results in the non-controlling interests having a deficit balance.
B95 If a subsidiary has outstanding cumulative preference shares that are classified as equity and are held by non-controlling interests, the entity shall compute its share of profit or loss after adjusting for the dividends on such shares, whether or not such dividends have been declared.
Changes in the proportion held by non-controlling interests
B96 When the proportion of the equity held by non-controlling interests changes, an entity shall adjust the carrying amounts of the controlling and non-controlling interests to reflect the changes in their relative interests in the subsidiary. The entity shall recognise directly in equity any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received, and attribute it to the owners of the parent.
Loss of control B97 A parent might lose control of a subsidiary in two or more arrangements (transactions). However, sometimes circumstances indicate that the multiple arrangements should be accounted for as a single transaction. In determining whether to account for the arrangements as a single transaction, a parent shall consider all the terms and conditions of the arrangements and their economic effects.
One or more of the following indicate that the parent should account
for the multiple arrangements as a single transaction:
(c) reclassify to profit or loss, or transfer directly to retained earnings if required by other Standards, the amounts recognised in other comprehensive income in relation to the subsidiary on the basis described in paragraph B99.
B99 If a parent loses control of a subsidiary, the parent shall account for all amounts previously recognised in other comprehensive income in relation to that subsidiary on the same basis as would be required if the parent had directly disposed of the related assets or liabilities.
Therefore, if a gain or loss previously recognised in other comprehensive income would be reclassified to profit or loss on the AASB 10 APPENDIX B disposal of the related assets or liabilities, the parent shall reclassify the gain or loss from equity to profit or loss (as a reclassification adjustment) when it loses control of the subsidiary. If a revaluation surplus previously recognised in other comprehensive income would be transferred directly to retained earnings on the disposal of the asset, the parent shall transfer the revaluation surplus directly to retained earnings when it loses control of the subsidiary.
Effective date C1 [Deleted by the AASB – see paragraphs Aus3.2 and Aus3.3] Transition C2 An entity shall apply this Standard retrospectively, in accordance with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors, except as specified in paragraphs C3–C6.
C3 When applying this Standard for the first time, an entity is not required
to make adjustments to the accounting for its involvement with either:
(a) entities that were previously consolidated in accordance with AASB 127 Consolidated and Separate Financial Statements and Interpretation 112 Consolidation – Special Purpose Entities and, in accordance with this Standard, continue to be consolidated; or (b) entities that were previously unconsolidated in accordance with AASB 127 and Interpretation 112 and, in accordance with this Standard, continue not to be consolidated.
C4 When application of this Standard for the first time results in an investor consolidating an investee that was not consolidated in
accordance with AASB 127 and Interpretation 112 the investor shall:
(a) if the investee is a business (as defined in AASB 3), measure the assets, liabilities and non-controlling interests in that previously unconsolidated investee on the date of initial application as if that investee had been consolidated (and thus applied acquisition accounting in accordance with AASB 3) from the date when the investor obtained control of that investee on the basis of the requirements of this Standard.
(b) if the investee is not a business (as defined in AASB 3), measure the assets, liabilities and non-controlling interests in that previously unconsolidated investee on the date of initial application as if that investee had been consolidated (applying
The investor shall recognise any difference between the amount of assets, liabilities and non-controlling interests recognised at the deemed acquisition date and any previously recognised amounts from its involvement as an adjustment to equity for that period. In addition, the investor shall provide comparative information and disclosures in accordance with AASB 108.
C5 When application of this Standard for the first time results in an investor no longer consolidating an investee that was consolidated in accordance with AASB 127 (as amended in 2008) and Interpretation 112, the investor shall measure its retained interest in the investee on the date of initial application at the amount at which it would have been measured if the requirements of this Standard had been effective when the investor became involved with, or lost control of, the investee. If measurement of the retained interest is impracticable (as defined in AASB 108), the investor shall apply the requirements of this Standard for accounting for a loss of control at the beginning of the earliest period for which application of this Standard is practicable, which may be the current period. The investor shall recognise any difference between the previously recognised amount of the assets, liabilities and non-controlling interest and the carrying amount of the investor’s involvement with the investee as an
C6 Paragraphs 23, 25, B94 and B96–B99 were amendments to AASB 127 made in 2008 that were carried forward into AASB 10. Except when an entity applies paragraph C3, the entity shall apply the requirements
in those paragraphs as follows:
(a) An entity shall not restate any profit or loss attribution for reporting periods before it applied the amendment in paragraph B94 for the first time.
(b) The requirements in paragraphs 23 and B96 for accounting for changes in ownership interests in a subsidiary after control is obtained do not apply to changes that occurred before an entity applied these amendments for the first time.
(c) An entity shall not restate the carrying amount of an investment in a former subsidiary if control was lost before it applied the amendments in paragraphs 25 and B97–B99 for the first time.
In addition, an entity shall not recalculate any gain or loss on the loss of control of a subsidiary that occurred before the amendments in paragraphs 25 and B97–B99 were applied for the first time.
References to AASB 9 C7 If an entity applies this Standard but does not yet apply AASB 9, any reference in this Standard to AASB 9 shall be read as a reference to AASB 139 Financial Instruments: Recognition and Measurement.
Withdrawal of other IFRSs C8 [Deleted by the AASB – see paragraph Aus3.5(a)] C9 [Deleted by the AASB – see paragraph Aus3.5(b)]
Exemption from Presenting Consolidated Financial Statements AG1 The following table summarises the circumstances in which the exemption from presenting consolidated financial statements set out in paragraphs 4-Aus4.2 of this Standard may be available to a parent entity. The exemption is available only if the requirements of those paragraphs are satisfied. For example, the exemption is not available to a parent entity if it is a disclosing entity.
FP = for-profit entity NFP = not-for-profit entity * The exemption would not be available by reference to the intermediate parent when it is a for-profit public sector entity unable to claim compliance with IFRSs – see paragraph Aus16.2 of AASB 101 Presentation of Financial Statements.
^ When the parent entity’s NFP ultimate or intermediate parent is able to claim compliance with IFRSs, the exemption is available.
AASB 10 GUIDANCE DELETED IFRS 10 TEXT Deleted IFRS 10 text is not part of AASB 10.
Paragraph C1 An entity shall apply this IFRS for annual periods beginning on or after 1 January 2013. Earlier application is permitted. If an entity applies this IFRS earlier, it shall disclose that fact and apply IFRS 11, IFRS 12, IAS 27 Separate Financial Statements and IAS 28 (as amended in 2011) at the same time.
Paragraph C8 This IFRS supersedes the requirements relating to consolidated financial statements in IAS 27 (as amended in 2008).
Paragraph C9 This IFRS also supersedes SIC-12 Consolidation – Special Purpose Entities.