Summary
Summary Group Statements Volume 1 Chapter 5
- Course
- Institution
An introduction to Group Statements and group companies
[Show more]
Seller
Follow
sjg2797
Reviews received
Content preview
Chapter 5Intragroup
Intragroup Balances
All intragroup A, L, E must be eliminated
Ensures assets and liabilities are not overstated
Loan between Parent and Sub
Dr Loan Liability
Cr Loan Asset
Dr Other Income
Cr Finance Costs
Elimination of transaction costs at acquisition
Costs constitute incremental costs as they would not have occurred had the
transaction itself not occurred
IFRS 3 says such costs must be expensed, if sub valued at FV p/l no problem
Valuing costs can be capitalised
If sub is FV oci then reverse capitalised costs
Must be done every year
Dr Trans costs Cr Investment in Sub
Bank Overdrafts and Guarantees
Pos balance of one entity can only be set off against balance of other if:
Acc at same bank
Bank will do set off in reality
Group will settle on net basis
Guarantees or contingencies to other member of group falls away on
consolidation
Intragroup Sales
Profit on such sales can only be realised when the asset is sold to an external
3rd party
Profits and losses resulting from such sales must be eliminated in full
Unrealised profits must be reversed
Unrealised profit closing stock
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller sjg2797. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $2.92. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
83662 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now