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

Chapter 12

Associates

1 Introduction

1.1 The origins of equity accounting

1.2 Development of IAS 28

1.2.1 IAS 28 (2011)

1.3 Other applicable IFRSs

1.4 Future developments

1.4.1 Possible project on equity accounting

1.4.2 Exposure Draft (ED/2011/4) - Investment Entities

2 Scope of IAS 28

2.1 Exemption for venture capital organisations and similar entities

2.1.1 Application of IAS 39 to associates exempt from IAS 28

2.1.1.A Entities with a mix of activities

2.1.1.B Designation of investments as ‘at fair value through profit or loss’

2.1.1.C Availability of fair value information

2.1.1.D Disclosure of interests in associates

2.1.2 Venture capital consolidations and partial use of fair value through profit or loss

2.2 Definition of ‘associate’ and related terms

2.2.1 Significant influence

2.2.1.A Lack of significant influence

2.2.1.B Holdings of less than 20% of the voting power

2.2.1.C Holdings of more than 50% of the voting power

2.2.1.D Potential voting rights

2.2.1.E Voting rights held in a fiduciary capacity

2.2.1.F Long-term restrictions over associate’s ability to transfer funds to investor

2.3 Requirement to apply the equity method

2.3.1 Associates held for sale

2.4 Separate financial statements

2.4.1 Impairment of investments in associates in separate financial statements

3 Application of the Equity Method

3.1 Overview

3.2 Similarities of equity accounting and consolidation

3.2.1 Differences between equity accounting and consolidation

3.3 Date of commencement of equity accounting ...