SIC12 BV2009 - SIC-12 SIC Interpretation 12...

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SIC-12 SIC Interpretation 12 Consolidation—Special Purpose Entities This version includes amendments resulting from IFRSs issued up to 31 December 2008. SIC-12 Consolidation—Special Purpose Entities was developed by the Standing Interpretations Committee and issued in December 1998. In April 2001 the International Accounting Standards Board resolved that all Standards and Interpretations issued under previous Constitutions continued to be applicable unless and until they were amended or withdrawn. Since then, SIC-12 and its accompanying documents have been amended by the following IFRSs: IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (issued December 2003) IAS 27 Consolidated and Separate Financial Statements (issued December 2003) IFRIC Amendment to SIC-12 Scope of SIC-12 Consolidation—Special Purpose Entities (issued November 2004). The following Interpretation refers to SIC-12: IFRIC 5 Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds (issued December 2004). © IASCF 1
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SIC-12 SIC Interpretation 12 Consolidation—Special Purpose Entities (SIC-12) is set out in paragraphs 8–10. SIC-12 is accompanied by a Basis for Conclusions and an appendix illustrating the application of the Interpretation. The scope and authority of Interpretations are set out in paragraphs 2 and 7–17 of the Preface to International Financial Reporting Standards . 2 © IASCF
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SIC-12 SIC Interpretation 12 Consolidation—Special Purpose Entities References IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors IAS 19 Employee Benefits IAS 27 Consolidated and Separate Financial Statements IAS 32 Financial Instruments: Presentation IFRS 2 Share-based Payment Issue 1 An entity may be created to accomplish a narrow and well-defined objective (eg to effect a lease, research and development activities or a securitisation of financial assets). Such a special purpose entity (‘SPE’) may take the form of a corporation, trust, partnership or unincorporated entity. SPEs often are created with legal arrangements that impose strict and sometimes permanent limits on the decision-making powers of their governing board, trustee or management over the operations of the SPE. Frequently, these provisions specify that the policy guiding the ongoing activities of the SPE cannot be modified, other than perhaps by its creator or sponsor (ie they operate on so-called ‘autopilot’). 2 The sponsor (or entity on whose behalf the SPE was created) frequently transfers assets to the SPE, obtains the right to use assets held by the SPE or performs services for the SPE, while other parties (‘capital providers’) may provide the funding to the SPE. An entity that engages in transactions with an SPE (frequently the creator or sponsor) may in substance control the SPE. 3
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This note was uploaded on 02/22/2012 for the course ACCOUNTING 402 taught by Professor Sanaabadry during the Spring '12 term at DISD.

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SIC12 BV2009 - SIC-12 SIC Interpretation 12...

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