IFRS 12 Disclosure of Interest in Other Entities is a consolidated disclosure standard requiring a wide range of disclosures about an entity’s interests in subsidiaries, joint arrangements, associates and unconsolidated ‘structured entities’. Disclosures are presented as a series of objectives, with detailed guidance on satisfying those objectives.
Source: PKF Summaries & Snapshots
Or in more detail……
SCOPE |
DEFINITIONS |
SIGNIFICANT JUDGEMENTS AND ASSUMPTIONS |
Applied by entities that have an interest in: Subsidiaries; joint arrangements, associates; and unconsolidated structured entities. IFRS 12 does not apply to:
Some, but not all, disclosure requirements apply to interests classified as held for sale in accordance with IFRS 5. |
Structured entity -An entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are directed by means of contractual arrangements. Income from a structured entity – Includes (but not is limited to) fees, interest, dividends, gains or losses on the remeasurement or derecognition of interests in structured entities and gains or losses from the transfer of assets and liabilities to the structured entity. Interest in another entity -Refers to contractual and non-contractual involvement that exposes an entity to variability of returns from the performance of the other entity. Evidenced by holding: debt instruments, equity instruments, and other forms of involvement. The following terms used in IFRS 12 are defined in IAS 27 Separate Financial Statements, IAS 28 Investments in Associates and Joint Ventures IFRS 10 Consolidated Financial Statements, and IFRS 11 Joint Arrangements:
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Disclose information about significant judgements and assumptions the made (and changes to those judgements and assumptions) in determining:
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INTERESTS IN SUBSIDIARIES REQUIRED DISCLOSURES |
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Information that enables users to understand: |
Information that enables users to evaluate: |
Information that enables users to evaluate: |
(i) Composition of the group and NCI interests in group activities Composition of the group For each subsidiary with material NCI’s:
Summarised financial information about the subsidiary. |
(ii) Nature and extent of restrictions Significant restrictions on ability to access or use the assets and settle the liabilities of the group, such as:
The nature and extent to which protective rights of NCI can significantly restrict the entity’s ability to access or use the assets and settle the liabilities of the group. The carrying amounts of the assets and liabilities to which those restrictions apply. |
(iii) Nature of risks in consolidated structured entities (CSE) Terms of any contractual arrangements that could require the parent or its subsidiaries to provide financial support to a CSE. If financial or other support has been provided to a CSE in the absence of a contractual obligation to do so:
If financial (or other) support has been provided to a previously unconsolidated structured entity that resulted in control, explanation of the relevant factors in reaching that decision. Any current intentions to provide financial (or other) support to a consolidated structured entity (including any intentions to assist in obtaining financial support). |
Information that enables users to evaluate: |
Information that enables users to evaluate: |
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(iv) Consequences of changes in a parent’s ownership interest in a subsidiary that do not result in a loss of control Present a schedule showing the effects on the equity (attributable to owners of the parent) of any changes in ownership interest that do not result in a loss of control. |
(v) Consequences of losing control of a subsidiary Disclose the gain or loss, if any, and:
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Information that enables users to evaluate: |
(i) Risks associated with an entity’s interests in joint ventures and associates Commitments relating to joint ventures Contingent liabilities incurred relating to joint ventures or associates (including its share of contingent liabilities incurred jointly with other investors), unless the probability of loss is remote. |
(ii) Nature, extent and financial effects of an entity’s interests in joint arrangements and associates
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(c) INTERESTS IN UNCONSOLIDATED STRUCTURED ENTITIES (UCSE) REQUIRED DISCLOSURES |
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Including, information about the exposure to risk from involvement in previous periods (even if the entity no longer has any contractual involvement with the entity at reporting date) |
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Information that enables users to understand: |
Information that enables users to evaluate: |
(i) Nature of interests Qualitative and quantitative information, including (but not limited to):
If an entity has sponsored UCSE, for which it does not provide information (e.g. because it holds no interest at reporting date), disclose:
An entity is required to present the information above:
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(ii) Nature of risks Disclose in tabular format (unless another format is more appropriate) a summary of:
If during the reporting period an entity has, without having a contractual obligation to do so, provided financial (or other) support to an UCSE in which it previously had or currently has an interest, disclose:
An entity is required to disclose any current intentions to provide financial or other support to UCSE, including intentions to assist the structured entity in obtaining financial support. |
Judgements and assumptions
Group structure
IFRS 12 Disclosure Subsidiaries – example
IFRS 12 Disclosure Joint arrangements – example
IFRS 12 Disclosure Associates – example
IFRS 12 Disclosure Unconsolidated structured entities – example
See also our friend: IFRS Community – IFRS 12
IFRS 12 Disclosure of Interest in Other Entities
IFRS 12 Disclosure of Interest in Other Entities IFRS 12 Disclosure of Interest in Other Entities IFRS 12 Disclosure of Interest in Other Entities
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IFRS 12 Disclosure of Interest in Other Entities IFRS 12 Disclosure of Interest in Other Entities IFRS 12 Disclosure of Interest in Other Entities
IFRS 12 Disclosure of Interest in Other Entities IFRS 12 Disclosure of Interest in Other Entities IFRS 12 Disclosure of Interest in Other Entities
IFRS 12 Disclosure of Interest in Other Entities IFRS 12 Disclosure of Interest in Other Entities IFRS 12 Disclosure of Interest in Other EntitiesEntities
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