Principles of Group Accounting under IFRS (eBook)

Andreas Krimpmann (Autor)

eBook Download: EPUB

2015
John Wiley & Sons (Verlag)
978-1-118-75138-1 (ISBN)

Infos

A professional perspective to implementing IFRS 10, 11, and 12

The new International Financial Reporting Standards (IFRS) 10, 11, and 12 are changing group accounting for many businesses. As business becomes increasingly global, more and more firms will need to transition using the codes and techniques described in Principles of Group Accounting under IFRS. This book is a practical guide and reference to the standards related to consolidated financial statements, joint arrangements, and disclosure of interests. Fully illustrated with a step-by-step case study, Principles of Group Accounting under IFRS is equally valuable as an introductory text and as a reference for addressing specific issues that may arise in the process of consolidating group accounts.

The new international standards will bring about significant changes in group reporting, and it is essential for accountants, auditors, and business leaders to understand their implications. Author Andreas Krimpmann is an internationally recognized authority on the transition from GAAP to IFRS, and this new text comes packaged with GAAP/IFRS comparison resources that will help make the changes clear. Other bonus resources include an Excel-based consolidation tool, checklists, and a companion website with the latest information. Learn about:

• Definitions, requirements, processes, and transition techniques for IFRS 10, 11, and 12 covering group level accounting
• Practical implementation strategies demonstrated through a clear case study of a midsize group
• Key concepts related to consolidated financial statements, joint ventures, management consolidation, and disclosure of interests
• Comparisons between GAAP and IFRS to clarify the required changes for international firms

Whatever stage of the consolidation process you are in, you will appreciate the professional perspective in Principles of Group Accounting under IFRS.

Autor

Andreas Krimpmann, Berlin, Germany, is a Certified Public Accountant and owner of Krimpmann MBA CPA, providing consulting and services in financial and management accounting. He is Head of the IFRS and Controlling working group of the Internationaler Controllerverein and Head of the IFRS-Practice Committee of the German CPA Society. Andreas is also an Associate Professor at Berlin universities (Beuth University of Applied Sciences and HTW University of Applied Sciences) for accounting, management accounting and taxes and teaches IFRS and group accounting at various training academies and educational institutions (e.g. Haufe Academy).

Inhalt

List of figures xiv

List of tables xvii

Preface xix

Introduction to the book xx

A The case study 1

1. About the group 1

2. Allocation of examples 1

B Legal requirements for consolidated financial statements4

1. IFRS standards 5

2. Exemptions 18

3. Local accounting standards 19

4. Taxation 20

5. Definitions 21

C Definition of groups 22

1. The control concept 23

2. Joint control 28

3. Loss of control 31

4. Group compositions 33

5. Special cases 34

D Preparation of consolidated financial statements and annualreports 37

1. Lifecycle of subsidiaries 38

2. Structures 39

3. The preparation process 48

4. Organization 54

E Initial consolidation 55

1. Basics 56

2. Mergers and acquisitions 62

3. Purchase price allocation 66

4. Other aspects of purchase price allocations 94

5. Consolidation techniques 96

6. Special cases 107

F Subsequent consolidation 121

1. Basics 122

2. Subsidiary preparation 125

3. Equity consolidation 131

4. Debt consolidation 136

5. Consolidation of income and expenses 144

6. Unrealized profits 156

7. Non-controlling interests 170

8. Group-level transactions 173

9. Special cases 186

G Associated companies 213

1. Basics 214

2. Consolidation techniques 216

3. Treatment of losses 236

4. Impairments 237

5. Special cases 238

H Joint arrangements 242

1. Basics 243

2. Accounting and consolidation 246

3. Disposals / Deconsolidation 249

I Changes in control 253

1. Basics 254

2. The parent's view 254

3. Increase in investments 255

4. Decrease in investments 266

5. Acquisitions and disposals without changes in control 275

6. Special cases 285

J Disposals and deconsolidation 288

1. Basics 289

2. Control 290

3. Deconsolidation techniques 291

4. Discontinued Operations 306

K Special areas 320

1. Currency translation of foreign operations 321

2. Deferred taxes in groups 334

3. Cash flow statements 344

4. Partnerships 350

5. Restructuring of groups 352

L Management consolidation 361

1. Basics 362

2. Business units 363

3. Projects and cost units 368

4. Dependency between management consolidations and consolidatedfinancial statements 370

M Consolidated financial statements 371

1. Basics 372

2. Statements 372

3. Notes & group disclosures 373

4. Management report 377

Appendix I: Fair value measurement ccclxxix

1. History ccclxxix

2. Definition ccclxxx

3. Measurement ccclxxxi

4. Measurement techniques for selected assets and liabilitiesccclxxxiii

Appendix II: IFRS - US-GAAP comparison ccclxxxv

Appendix III: IFRS ccclxxxviii

1. List of IFRS ccclxxxviii

2. IFRIC and SIC interpretations ccclxxxix

Reference list cccxci

Glossary cccxcii

Index cccxcvi

Textauszug

LIST OF FIGURES

1. Fig A.1 Business unit structure Flexing Cables
2. Fig A.2 Group legal structure Flexing Cables
3. Fig B.1 Overall transition procedure to apply IFRS 10
4. Fig B.2 Application options of IFRS 3 and IFRS 10
5. Fig B.3 Retrospective handling as a subsidiary based on a purchase price allocation and its subsequent accounting
6. Fig B.4 Retrospective handling as an associate based on a purchase price allocation and its subsequent accounting
7. Fig B.5 Retrospective handling as a financial investment based on fair value and its subsequent accounting
8. Fig C.1 Structure of rights and interests
9. Fig C.2 Workflow in determining joint control
10. Fig C.3 Dependency between types of investment and their control
11. Fig C.4 Typical example of a limited partnership structure
12. Fig D.1 Lifecycle of a subsidiary in a group
13. Fig D.2 Typical structure of an accounting corporate centre
14. Fig D.3 Environment of a shared service centre
15. Fig D.4 Example of an account structure of the split-account method
16. Fig D.5 Example of an enhanced group chart of accounts
17. Fig D.6 Accounting standard conversion at group level
18. Fig D.7 Accounting standard conversion on reporting level
19. Fig D.8 Accounting standard conversion at local level
20. Fig D.9 Implementation in accounting systems
21. Fig D.10 Closing process of the group
22. Fig E.1 Lifecycle of a corporation: Initial consolidation
23. Fig E.2 Accounting steps of the integration of a new subsidiary in the group
24. Fig. E.3 Accounting hierarchy in a group
25. Fig E.4 Accounting step: IFRS conversion to prepare the opening balance sheet
26. Fig E.5 Timing of the IFRS conversion during the initial consolidation
27. Fig E.6 Accounting step: Purchase price allocation
28. Fig E.7 Embedded purchase price allocation as part of the initial consolidation
29. Fig E.8 Possible acquisition dates
30. Fig E.9 Measurement period and its related accounting
31. Fig E.10 Treatment of asset with no further use
32. Fig E.11 Measurement period – Adjustment of assets acquired and liabilities assumed
33. Fig E.12 Workflow to initially account for intangible assets
34. Fig E.13 Lease matrix
35. Fig E.14 Goodwill calculation, purchased goodwill method
36. Fig E.15 Goodwill calculation, full goodwill method
37. Fig E.16 Workflow during measurement period
38. Fig E.17 Example of a reconciliation schedule
39. Fig E.18 Accounting step: Adjustments and consolidation
40. Fig E.19 Reverse acquisitions: accounting allocations
41. Fig E.20 Allocation scheme for unvested share-based payment
42. Fig E.21 Classification of pre-existing relationships
43. Fig E.22 Calculation scheme for the accounting of contractual pre-existing relationships
44. Fig E.23 Non-material parent company
45. Fig F.1 Lifecycle of a corporation: Subsequent consolidation
46. Fig F.2 Preparation mechanics of consolidated financial statements
47. Fig F.3 Required process tasks in subsequent consolidations
48. Fig F.4 Timing of business transaction
49. Fig F.5 Intercompany reconciliation matrix for debts
50. Fig F.6 Structure of offset differences
51. Fig F.7 Types of cut-off differences
52. Fig F.8 Simple settlement process
53. Fig F.9 Netting process
54. Fig F.10 Example of multi-currency netting
55. Fig F.11 Base transaction for immediate sale by external supply
56. Fig F.12 Base transaction for immediate sale by inventory use
57. Fig F.13 Base transaction for later sale
58. Fig F.14 Base transaction for later sale in the subsequent year
59. Fig F.15 Base transaction for own use
60. Fig F.16 Transactions for own consumption
61. Fig F.17 Underlying business model of profit & loss statement by nature
62. Fig F.18 Intercompany reconciliation matrix for profit & loss
63. Fig F.19 Unrealized profit scheme
64. Fig F.20 Cost allocation scheme for transactions for later sale
65. Fig F.21 Cost allocation scheme for transactions for own use
66. Fig F.22 Dependency between transfer pricing and group accounting
67. Fig F.23 Valuation chain in groups
68. Fig F.24 Group loans
69. Fig F.25 Basic guarantee applications
70. Fig F.26 Tax dependencies
71. Fig F.27 Reporting structure for transfer pricing purposes
72. Fig F.28 Workflow of the impairment test
73. Fig F.29 Dependency between nominal rate and real rate
74. Fig F.30 Discount rate gross-up
75. Fig F.31 Discount formula of value in use
76. Fig F.32 Workflow of impairment test of a cash-generating unit considering corporate assets
77. Fig F.33 Example of cash-generating units structure
78. Fig F.34 Calculation of disposed goodwill
79. Fig F.35 Workflow of recording an impairment loss of a cash-generating unit
80. Fig F.36 Timing of impairment loss and its reversal
81. Fig F.37 Timing of profit distribution
82. Fig F.38 Profit transfer options
83. Fig F.39 System of group internal sale of non-current assets
84. Fig F.40 Level II components of intercompany sales
85. Fig F.41 Typical structure of multi-level groups
86. Fig F.42 Treatment of non-controlling interests in multi-level groups
87. Fig F.43 Structure of a chain consolidation
88. Fig F.44 Calculation scheme of adjustments to non-controlling interests
89. Fig F.45 Calculation scheme of goodwill and level III adjustments
90. Fig F.46 Timing of acquisitions in multi-level groups
91. Fig F.47 Structure of a simultaneous consolidation
92. Fig F.48 Shareholder matrix
93. Fig F.49 Multi-parent structures in groups
94. Fig F.50 Reciprocal interests
95. Fig F.51 Associates as parents
96. Fig G.1 Purchase price allocation scheme of the initial consolidation of associates
97. Fig G.2 Auxiliary calculation for the investments in associates company
98. Fig G.3 Adjustments as part of the subsequent consolidation of an associated
99. Fig G.4 Upstream and downstream transactions
100. Fig G.5 Timing of associate disposal
101. Fig H.1 Scope check of IFRS 11 to determine joint ventures and joint operations
102. Fig H.2 Examples of contractual agreements on voting rights and the impact on joint control
103. Fig H.3 Business transactions with joint operations
104. Fig I.1 Lifecycle of a corporation: Transitional consolidation
105. Fig I.2 Typical acquisition structure of step acquisitions
106. Fig I.3 Timing of partial disposals of associates
107. Fig I.4 Calculation of remaining book value
108. Fig I.5 Calculation of remaining book value
109. Fig I.6 Calculation of remaining book value
110. Fig I.7 Timing of purchases of financial investments
111. Fig I.8 Changes in joint ventures and their accounting
112. Fig I.9 Calculation of attributable non-controlling interests based on percentages
113. Fig I.10 Calculation of attributable non-controlling interests based on fair values
114. Fig J.1 Lifecycle of a corporation: Deconsolidation
115. Fig J.2 Types of loss of control
116. Fig J.3 Transfer of control
117. Fig J.4 Goodwill calculation on disposal
118. Fig J.5 IFRS 5 disposal timing and the decision date
119. Fig J.6 Measurement scheme for disposal groups and discontinued operations
120. Fig J.7 IFRS 5 Timing of valuation adjustments
121. Fig J.8 Sample balance sheet including the presentation of discontinued operations
122. Fig J.9 Sample profit & loss statement including the presentation of discontinued operations
123. Fig J.10 Costs to sell as part of business combinations
124. Fig K.1 System of currency translations
125. Fig K.2 Translation scenarios
126. Fig K.3 Exchanges differences due to different exchange rates
127. Fig K.4 Example of temporary differences
128. Fig...

Produkt-Details

• Erscheint lt. Verlag: 18.3.2015
• Reihe/Serie: Wiley Regulatory Reporting
• Reihe/Serie: Wiley Regulatory Reporting
• Reihe/Serie: Wiley Regulatory Reporting
• Sprache: englisch
• Themenwelt: Recht / Steuern ► Wirtschaftsrecht
• Themenwelt: Wirtschaft ► Betriebswirtschaft / Management ► Rechnungswesen / Bilanzen
• Schlagworte: accountants • Accounting • Accounting Special Topics • Advanced Accounting • Andreas Krimpmann • auditors • Business Leaders • Case study • Consolidated Financial Statements • consolidating group accounts • consolidation process • consolidation tool • disclosure of interests • Financial Accounting • Finanzbuchhaltung • GAAP • GAAP/IFRS comparison • Group Accounting • group level accounting • group reporting • IFRS 10, 11, and 12 • International Financial Reporting Standards • international firms • International standards • joint arrangements • management consolidation • midsize group • Principles of Group Accounting under IFRS • Rechnungswesen • Rechnungswesen / Diplom • Spezialthemen Rechnungswesen • transition techniques
• ISBN-10: 1-118-75138-8 / 1118751388
• ISBN-13: 978-1-118-75138-1 / 9781118751381