f7-21 combination-csfp讲义教材.ppt

Copyright ? 2007 Pearson Addison-Wesley. All rights reserved. 5-* Part D Business Combination Topic 1 Consolidated Statement of financial position The nature of business combination What is a “group”? Definitions A parent is an entity that has one or more subsidiaries. A subsidiary is an entity that is controlled by another entity. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Acquisition method: all groups are now consolidated using the acquisition method. 5-* Part D Business Combination Topic 1 Consolidated Statement of financial position Exclusions from consolidation IAS 27 required that consolidated financial statements shall include all subsidiaries of the parent. There are two special cases however: It operates under severe long-term restrictions which are so serious that the parent has lost control over its investment. 5-* Part D Business Combination Topic 1 Consolidated Statement of financial position Exclusions from consolidation The following table shows the treatment of exclude subsidiaries in the consolidated financial statements: 5-* Part D Business Combination Topic 1 Consolidated Statement of financial position Basic principle of consolidation financial statement A group comprise at minimum a parent company and a subsidiary A subsidiary relationship exists where the parent company controls the subsidiary, control is normally achieved by the parent owning a majority (50%) of the ordinary share (voting rights) in the subsidiary. All business combination must be accounted for the Acquisition method. The pooling of interest method is prohibited. The basic rule with the parent and subsidiary financial statements is that it shows all assets and liability. Intra-group items are excluded. 5-* Part D Business Combination Topic 1 Consolidated Statement of financial position Basic format for consolidation SOFP See attachment 5-* Part D Business Combination Topic 1 Consolidated St