IAS-27

1. IAS-27 Consolidated and Separate Financial Statements IAS-27

2. Outline • Introduction • Definitions • Accounting for Subsidiaries in separate financial statements • Truth and fairness • Inclusions • Parent and Control IAS-27

3. Outline • Sundry provision of IAS-27 • Results of intra-group trading • Accounting year ends • Accounting policies • Date of acquisition or disposal • Disclosure • IAS-27 disclosure IAS-27

4. Definitions • Subsidiary:an entity that is controlled by another entity. • Parent:an entity that has one or more subsidiary. • Group:a parent and all its subsidiaries. • Minority interest:the part of interest ,in a subsidiary, that is not owned by the parent. • Control:the power to govern financial and operating policies of an entity to obtain benefits from its activities. • Business combination:the bringing together of separate entities into one reporting entity. IAS-27

5. Introduction • Truth and fairness • Present the control and ownership of the net assets of subsidiary companies • Include all entities controlled by the parent company IAS-27

6. Inclusions • Parent and control • control exist when company owns, directly or indirectly, more than one half of the voting power of another entity. IAS-27

7. Inclusions • Control also exist when: • Over more than one half of the voting rights by virtue of an agreement with other investors. • The power to govern the financial and operating policies of an entity under an agreement. • To appoint or remove the majority of the members of the board of directors. • To cast the majority of votes at meetings of the board of directors . Illustration On control IAS-27

8. Sundry provision of IAS-27 • Results of intra-group trading • Intra group balances and intra-group transactions and resulting unrealized profits should be eliminated in full. • Accounting year ends • Co-terminus year ends • The financial statements of the parent and subsidiaries are drawn up to the same date. IAS-27

9. Sundry provision of IAS-27 • Different reporting dates • Either the subsidiary must prepare special statements as at the same date as the group. • Or, if at different dates if : • The difference is no longer than 3 months • Adjustments are made for the effects of significant transactions or other events that occur between those dates and the date of the parent’s financial statements. IAS-27

10. Sundry provision of IAS-27 • Accounting policies • Consolidated financial statements should be prepared using uniform accounting policies for similar transactions and events. IAS-27

11. Sundry provision of IAS-27 • Date of acquisition or disposal • The results of operations of a subsidiary are included in the consolidated financial statement as from the date of acquisition. • The date of acquisition is the date on which control of the acquired subsidiary is effectively transferred to the buyer. IAS-27

12. Disclosure • IAS-27 disclosure • Consolidated Financial statement • The nature of the relationship (voting power). • Reporting dates • Any significant restrictions on the subsidiary IAS-27

13. IAS-27 Thank you for listening Any questions? IAS-27