International GAAP 2012: Generally Accepted Accounting Practice under International Financial Reporting Standards

Chapter 6

Consolidated financial statements (IAS 27)

1 The Concept of a Group

1.1 Background

1.2 The objectives of consolidated financial statements under IAS 27

1.3 How consolidated and separate financial statements under IAS 27 are dealt with in Chapters 6, 8 and 9

1.4 Consolidation project

1.5 Future developments

2 Definitions in IAS 27

2.1 Control

2.1.1 Primary indicators of control

2.1.2 Potential voting rights

2.1.2.A Potential voting rights over associates and joint ventures

2.1.2.B What Rights are ‘Currently Exercisable’?

2.1.2.C Management intention and ability to exercise potential ownership rights

2.1.3 De facto control

2.1.3.A IASB statement on de facto control

2.1.3.B EY views on the IASB’s statement on de facto control

2.1.4 Investments held as a trustee or fiduciary

2.2 Special purpose entities

2.2.1 Description of an SPE

2.2.2 Determining whether an entity controls an SPE

2.2.2.A Benefits need not necessarily be financial

2.2.2.B Majority of the benefits and risks

2.2.3 Subsequent reassessment of control of an SPE

2.2.4 Securitisation transactions

3 Requirement to Prepare Consolidated Financial Statements

3.1 Exemption from preparing consolidated financial statements

3.1.1 Condition (a) – consent of non-controlling shareholders

3.1.2 Condition (b) – securities not traded in a public market

3.1.3 Condition (c) – not filing financial statements for listing securities

3.1.4 Condition (d) – parent’s IFRS financial statements are publicly available

3.2 Entity no longer ...