IFRS News: New consolidations standards
8.06.2011Company: Amcham
The new Standards on consolidations, joint arrangements and related disclosures are part of a package that merits the
attention of all companies with significant involvement in other entities.
IFRS 10 provides a revised framework to assess when one entity controls another that will apply both to more
conventional subsidiaries and to special purpose vehicles. We expect that, in most cases, conclusions as to what should be consolidated will be unchanged. However, ‘borderline’ consolidation decisions taken under IAS 27 will need to be reassessed and some will inevitably be revised. IFRS 12’s enhanced disclosure requirements will be particularly important in bringing transparency to more judgemental situations, including special purpose vehicles. IFRS 11 meanwhile eliminates the use of proportionate consolidation for joint ventures. This will be a significant presentational change for the many venturers that chose this accounting policy under IAS 31. Although net assets will not be affected, the removal of that method of accounting will affect individual balance sheet and performance ratios.
If you want to obtain a copy of the full text version of this publication, please contact:
Mr. Helmut Hetlinger, Managing Partner
IB Grant Thornton
Na Bojišti 18
CZ-120 00 Praha 2
T +420 296 152 111
F +420 296 181 483
E h.hetlinger@ib-gtpraha.cz
