Section 24 - AASB 127 - Consolidated and Separate Financial Statements - July 2004 - Intragroup balances, transactions, income and expenses shall be eliminated in full. | Zoe
24 Intragroup balances, transactions, income and expenses shall be eliminated in full.
25 Intragroup balances and transactions, including income, expenses and dividends, are eliminated in full. Profits and losses resulting from intragroup transactions that are recognised in assets, such as inventory and fixed assets, are eliminated in full. Intragroup losses may indicate an impairment that requires recognition in the consolidated financial statements. AASB 112 Income Taxes applies to temporary differences that arise from the elimination of profits and losses resulting from intragroup transactions.
26 The financial statements of the parent and its subsidiaries used in the preparation of the consolidated financial statements shall be prepared as of the same date. When the end of the reporting period of the parent is different from that of a subsidiary, the subsidiary prepares, for consolidation purposes, additional financial statements as of the same date as the financial statements of the parent unless it is impracticable to do so.
27 When, in accordance with paragraph 26, the financial statements of a subsidiary used in the preparation of consolidated financial statements are prepared as of a date different from that of the parent, adjustments shall be made for the effects of significant transactions or events that occur between that date and the date of the parent’s financial statements. In any case, the difference between the end of the reporting period of the subsidiary and that of the parent shall be no more than three months. The length of the reporting periods and any difference between the ends of the reporting periods shall be the same from period to period.
28 Consolidated financial statements shall be prepared using uniform accounting policies for like transactions and other events in similar circumstances.
29 If a member of the group uses accounting policies other than those adopted in the consolidated financial statements for like transactions and events in similar circumstances, appropriate adjustments are made to its financial statements in preparing the consolidated financial statements.
30 The income and expenses of a subsidiary are included in the consolidated financial statements from the acquisition date as defined in AASB 3. The income and expenses of a subsidiary are included in the consolidated financial statements until the date on which the parent ceases to control the subsidiary. The difference between the proceeds from the disposal of the subsidiary and its carrying amount as of the date of disposal, including the cumulative amount of any exchange differences that relate to the subsidiary recognised in other comprehensive income in accordance with AASB 121 The Effects of Changes in Foreign Exchange Rates, is reclassified to consolidated profit or loss as a reclassification adjustment as the gain or loss on the disposal of the subsidiary.
31 An investment in an entity shall be accounted for in accordance with AASB 139 Financial Instruments: Recognition and Measurement from the date that it ceases to be a subsidiary, provided that it does not become an associate as defined in AASB 128 or a jointly controlled entity as described in AASB 131.
32 The carrying amount of the investment at the date that the entity ceases to be a subsidiary shall be regarded as the cost on initial measurement of a financial asset in accordance with AASB 139.
33 Minority interests shall be presented in the consolidated statement of financial position within equity, separately from the parent shareholders’ equity. Minority interests in the profit or loss of the group shall also be separately disclosed.
34 The profit or loss is attributed to the parent shareholders and minority interests. Because both are equity, the amount attributed to minority interests is not income or expenses.
35 Losses applicable to the minority in a consolidated subsidiary may exceed the minority interest in the subsidiary’s equity. The excess, and any further losses applicable to the minority, are allocated against the majority interest except to the extent that the minority has a binding obligation and is able to make an additional investment to cover the losses. If the subsidiary subsequently reports profits, such profits are allocated to the majority interest until the minority’s share of losses previously absorbed by the majority has been recovered.
36 If a subsidiary has outstanding cumulative preference shares that are held by minority interests and classified as equity, the parent computes its share of profits or losses after adjusting for the dividends on such shares, whether or not dividends have been declared.
Accounting for Investments in Subsidiari Accounting for Investments in Subsidiaries, Jointly Controlled Entities and Associates in Separate Financial Statements
Accounting for Investments in Subsidiaries, Jointly Controlled Entities and Associates in Separate Financial Statements
37 When an entity prepares separate financial statements, it shall account for investments in subsidiaries, jointly controlled entities and associates either:
(a) at cost, or
(b) in accordance with AASB 139.
The entity shall apply the same accounting for each category of investments. Investments accounted for at cost shall be accounted for in accordance with AASB 5 Non-current Assets Held for Sale and Discontinued Operations when they are classified as held for sale (or included in a disposal group that is classified as held for sale) in accordance with AASB 5. The measurement of investments accounted for in accordance with AASB 139 is not changed in such circumstances.
37A An entity shall recognise a dividend from a subsidiary, jointly controlled entity or associate in profit or loss in its separate financial statements when its right to receive the dividend is established.
37B When a parent reorganises the structure of its group by establishing a new entity as its parent in a manner that satisfies the following criteria:
(a) the new parent obtains control of the original parent by issuing equity instruments in exchange for existing equity instruments of the original parent;
(b) the assets and liabilities of the new group and the original group are the same immediately before and after the reorganisation; and
(c) the owners of the original parent before the reorganisation have the same absolute and relative interests in the net assets of the original group and the new group immediately before and after the reorganisation
and the new parent accounts for its investment in the original parent in accordance with paragraph 37(a) in its separate financial statements, the new parent shall measure cost at the carrying amount of its share of the equity items shown in the separate financial statements of the original parent at the date of the reorganisation.
37C Similarly, an entity that is not a parent might establish a new entity as its parent in a manner that satisfies the criteria in paragraph 37B. The requirements in paragraph 37B apply equally to such reorganisations. In such cases, references to ‘original parent’ and ‘original group’ are to the ‘original entity’.
38 This Standard does not mandate which entities produce separate financial statements available for public use. Paragraphs 37 and 39–42 apply when an entity prepares separate financial statements that comply with Australian equivalents to IFRSs. The entity also produces consolidated financial statements available for public use as required by paragraphs 9 and Aus9.1, unless the exemption provided in paragraphs 10 and Aus10.1 is applicable.
39 Investments in jointly controlled entities and associates that are accounted for in accordance with AASB 139 in the consolidated financial statements shall be accounted for in the same way in the investor’s separate financial statements.