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Property, Plant and Equipment (PPE)

PPE - Introduction

17.1 Property, Plant and Equipment applies to accounting for property, plant and equipment and accounting for investment property whose fair value cannot be measured reliably without undue cost or effort on an ongoing basis. Investment Property applies to investment property whose fair value can be measured reliably without undue cost or effort. ...continue reading "Property, Plant and Equipment"

Investment property - Introduction

16.1 Investment property applies to accounting for investments in land or buildings that meet the definition of investment property (See Definition and initial recognition of investment property – Owner and Lessee) and some property interests held by a lessee under an operating lease (see Definition and initial recognition of investment property - Lessee) that are treated like investment property. Only investment property whose fair value can be measured reliably without undue cost or effort on an ongoing basis is accounted for in accordance with this section at fair value through profit or loss. All other investment property is accounted for using the cost model in Property, Plant and Equipment and remains within the scope of Property, Plant and Equipment unless a reliable measure of fair value becomes available and it is expected that fair value will be reliably measurable on an ongoing basis. ...continue reading "Investment Property"

So, what exactly is a joint venture?

Joint ventures are economic arrangements between two or more parties where key strategic decisions are made unanimously by the entities (the “venturers”) that share control. Key strategic decisions would include decisions that significantly impact sales and purchases of goods and services; research and development of new products; acquisitions and disposals; and the funding structure of the venture. Joint ventures may appear in incorporated or unincorporated form (i.e. a joint venture need not result in the creation of a separate legal entity). “Strategic alliances” in which companies agree to work together to promote each other’s products or services may also be considered joint ventures. ...continue reading "So, what exactly is a joint venture?"

An entity with joint control of an investee shall account for its investment in a joint venture using the equity method except when that investment qualifies for exemption in IAS 28.

The exemptions include: ...continue reading "Investments in Joint Ventures – Overview"

Investments in Joint ventures describes:

  1. accounting for joint ventures in consolidated financial statements, and
  2. in the financial statements of an investor that is not a parent but that has a venturer’s interest in one or more joint ventures.

Accounting policy election in Separate financial statements establishes the requirements for accounting for a venturer’s interest in a joint venture in separate financial statements. ...continue reading "Investments in Joint Ventures"

Investments in Associates describes:

  1. the accounting for associates in consolidated financial statements, and
  2. in the financial statements of an investor that is not a parent but that has an investment in one or more associates.

Accounting policy election in Separate financial statements establishes the requirements for accounting for associates in separate financial statements. ...continue reading "Investments in Associates"

Just as a starter, two definitions!

Associate: An entity, including an unincorporated entity such as a partnership, over which an investor has significant influence and which is neither a subsidiary nor an interest in a joint venture.

Significant influence: The power to participate in the financial and operating policy decisions of the investee but it is not control or joint control over those policies. ...continue reading "Investments in Associates – Highlights"

Entities under common control combined

9.28 Combined financial statements are a single set of financial statements of two or more entities under common control (as described in Exceptions to accounting for Business Combinations sub (a) of Business Combinations and Goodwill). Combined financial statements does not require combined financial statements to be prepared.

Combined Financial Statements comply in full to this section

...continue reading "Combined financial statements"

Presentation of separate financial statements

9.24 It is not required to present separate financial statements for the parent entity or for the individual subsidiaries.

9.25 Separate financial statements are a second set of financial statements presented by an entity in addition to any of the following: ...continue reading "Separate financial statements"

Required disclosures in consolidated financial statements

9.23 The following disclosures shall be made in consolidated financial statements:

  1. the fact that the statements are consolidated financial statements;
  2. the basis for concluding that control exists when the parent does not own, directly or indirectly through subsidiaries, more than half of the voting power;
  3. any difference in the reporting date of the financial statements of the parent and its subsidiaries used in the preparation of the consolidated financial statements; and
  4. the nature and extent of any significant restrictions (for example resulting from borrowing arrangements or regulatory requirements) on the ability of subsidiaries to transfer funds to the parent in the form of cash dividends or to repay loans.

...continue reading "Disclosures in consolidated financial statements"