Group Accounting

1. Consolidate (IFRS 10) -> outright control

2. Equity Accounting (IAS 28) -> significance influence or joint venture

3. Financial Asset Accounting (IFRS 9) -> no influence -> fair value methode

(IFRS 11 for joint operation -> account for assets, liabilities etc)

1. power over the investee

2. exposure or rights to variable returns from its involvement with the investee

3. ability to use its power over the investee to affect the amount of the investors return

Non controlling interest als Teil des equity -> source of equity capital

NCI (t+1) = NCI (t) + share income subsidiary + share OCI subsidiary - dividends to NCI

calculation of net income (100% parent & subsidiary)

-> anschließende Aufteilung des net incomes anteilig für parent und subsidiary

• operating CF: 100% parent and subsidiary

• financing CF: - dividends paid to NCI

1. initial recognition:

   - at acquisition cost (start value - carrying value)

2. subsequent accounting:

   - carrying (t+1) = carrying (t) + share Net Income + share OCI - dividends +- other changes in equity

Venture Capital Organisations, mututal funds and unit trusts -> investment entities

option to use fair value method (IFRS 9):

1. FVTPL (default) obligation for trading purposes

2. FVOCI -> irrevocable choice before initial recognition

1. representation on the board of directors

2. participation in the policy-making process, incl. decisions about dividends

3. material transactions between the entity and investee

4. interchange of managerial personell

5. provision of essential information

Balance sheet:

carrying amout -> asset

Income statement:

share of profit associate is reported (dividends are not treated as income)

CF statement:

operating CF: bei indirekter Methode wird der share

investing CF: + dividends

reporting at fair value (fair value must be remeasured at each reporting date)

1. FVTPL (default) pflicht bei Trading purpose

   • initial recognition at fair value, transaction costs are expensed in P&L

2. FVOCI -> irrevocable choice before initial recognition (no Recycling)

   • changes fair value in OCI (bei Verkauf Umbuchung innerhalb von equity in retained earnings)

   • dividends in P&L

   • initial recognition at fair value - transaction cost -> effect of transaction cost in next revaluation

1. mark-to-market: fair value based on quoted prices in active markets

2. mark-to-model: fair value based on observable market data (others the level 1)

3. mark-to-myth: fair value based on valuation techniques with inputs that ar not based on observable market data