Unit 11 - Grp Rep - Consol Fin Stat

Investor requires to use equity accounting to account

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Unformatted text preview: accordance with HKAS 28 (2011) & HKFRS 12. Investor requires to use “Equity Accounting” to account for both investments in associates and investments in joint ventures. • Financial Instrument is an investment in an investee that the investor has no control, joint control or significant influence over the financial and operating policy of the investee e.g. voting rights less than 20% in shares etc. Accounting and reporting should be in accordance with HKAS 39, HKAS 32, HKFRS 7 & HKFRS 9. 6 (II) Preparation of Group Reports with Subsidiary – Consolidation Financial Statements • Two different approaches to consolidate subsidiaries: Group Reports To include To include 100% of assets & liabilities of the entity 80% of assets & liabilities of the entity Full Consolidation Proportionate Consolidation For subsidiary (HKFRS 3) 7 (a) Elimination Adjustments on Consolidation Investment in Subsidiary in the books of Parent Subsidiary’s Equity at Acquisition Date Fully Eliminated Intra-group Balances and Intra-group Transactions and Any Related Unrealised Profits Fully Eliminated 8 (b) Non-controlling Interests (NCI) in Partial Acquisitio...
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