CONSOLIDATION

Compiled by: Murtaza Quaid, ACA

 CONSOLIDATED FINANCIAL STATEMENTS

Single Economic  IFRS 10 Consolidated Financial Statements requires a parent to present

consolidated financial statements in which the accounts of the parent and
Entity
subsidiaries are combined and presented as a “Single Economic Entity”

Uniform  Uniform accounting policies should be used. Adjustments must be made

Accounting where members of a group use different accounting policies, so that their
Policies financial statements are suitable for consolidation.

 Under IAS 27 Separate Financial Statements, the investment in a

subsidiary, associate or joint venture can be carried in the investor’s
Accounting separate financial statements either:
Treatment in
Separate  At cost;
Financial  At fair value (IFRS 9 Financial Instruments); or
Statements of
the  Using the equity method (IAS 28 Investments in Associates & Joint
Investor Ventures.
Company  If the investment is carried at fair value under IFRS 9, both the investment
(at fair value) and the revaluation gains or losses on the investment must
be cancelled on consolidation.
Compiled by: Murtaza Quaid, ACA
 CONSOLIDATED FINANCIAL STATEMENTS

Investor Company does

Investor Company prepares Consolidated
not prepare Consolidated
F/S as it has investments in subsidiary
F/S as it has no subsidiary
Type of Investment
Separate F/S of the Separate F/S of the
Consolidated F/S
Investor Company Investor Company

Simple Investment
Fair value (IFRS 9) Fair value (IFRS 9) Fair value (IFRS 9)
(Less than 20%)

Cost or
Investment in Associate
Equity Accounting Fair value (IFRS 9) or Equity Accounting
(20% to 50%)
Equity Accounting

Cost or
Investment in Subsidiary
N/A Fair value (IFRS 9) or Consolidation
(More than 50%)
Equity Accounting

Compiled by: Murtaza Quaid, ACA

 CONSOLIDATED FINANCIAL STATEMENTS

Acquisition of Subsidiary’s Share

Simple Business Combination achieved in Stages / Further

Acquisition Step Acquisition / Piecemeal Acquisition Acquisition

 For example,
60% to 80%
Simple Investment Associate to shareholding
to Subsidiary Subsidiary

 For example,  For example,

10% to 80% 30% to 80%
shareholding shareholding

Compiled by: Murtaza Quaid, ACA

 CONSOLIDATED FINANCIAL STATEMENTS

(1) Simple Acquisition of Subsidiary

CHOICE
Measure NCI at acquisition date at
Measure NCI at acquisition date at fair value
proportionate share of the fair value of the
(i.e. No. of NCI’s shares × Share Price)
subsidiary's net assets

Calculate goodwill at the date of acquisition Calculate goodwill at the date of acquisition (
(i.e. the parent achieves control) as follow: i.e. the parent achieves control) as follow:

- Fair value of Consideration transferred XXXX - Fair value of Consideration transferred XXXX
- Non-Controlling Interest (At Fair Value) XXXX - Non-Controlling Interest (At proportionate
Less. FV of Identifiable Net Assets of subsidiary (XXX) share of FV of the subsidiary's net assets) XXXX
Goodwill / (Bargain Purchase Gain) XX / (XX) Less. FV of Identifiable Net Assets of subsidiary (XXX)
Goodwill / (Bargain Purchase Gain) XX / (XX)

Consolidate goodwill, assets, liabilities and NCI of the subsidiary at the year end.
Journal Entry at the date the parent achieves control is as follow:
Debit: Goodwill XXXX
Debit: Net Assets of Subsidiary XXXX
Credit: FV of Consideration transferred XXXX
Credit: Non-Controlling Interest XXXX

Compiled by: Murtaza Quaid, ACA

 CONSOLIDATED FINANCIAL STATEMENTS

(2) Step Acquisition – Simple Investment to Subsidiary (Example, from 10% to 80% shareholding)
- In substance, an investment has been ‘sold’ and a subsidiary has been ‘purchased’.
- The investment previously held is remeasured to fair value at the date of control and a gain/(loss) is recognized. The
fair value gain/(loss) is recognized in P/L or OCI (as per the classification of investment under IFRS 9)
 Consolidated statement of profit or loss and other comprehensive income
- Remeasure the investment to fair value at the date the parent achieves control. Journal Entry would be as follow:
Debit: Equity Investment XXXX
Credit: Fair Value Gain / (Loss) – P/L or OCI XXXX
- Consolidate the results as a subsidiary from the date the parent achieves control.
 Consolidated statement of financial position
- Calculate goodwill at the date the parent achieves control as follow:
Add. Fair value of investment previously held XXXX
Add. Fair value of Consideration transferred XXXX
Add. Non-Controlling Interest XXXX
Less. FV of Identifiable Net Assets of subsidiary (at the date of control) (XXX)
Goodwill / (Bargain Purchase Gain) XX / (XX)
- Consolidate goodwill, assets, liabilities and NCI of the subsidiary at the year end. Journal Entry at the date the
parent achieves control is as follow:
Debit: Goodwill XXXX
Debit: Net Assets XXXX
Credit: FV of investment previously held XXXX
Credit: FV of Consideration transferred XXXX
Credit: Non-Controlling Interest XXXX
Compiled by: Murtaza Quaid, ACA
 CONSOLIDATED FINANCIAL STATEMENTS

(3) Step Acquisition - Associate to Subsidiary (Example, from 30% to 80% shareholding)
- In substance, an associate has been ‘sold’ and a subsidiary has been ‘purchased’.
- The investment previously held is remeasured to fair value at the date of control and a gain/(loss) is recognized. The fair
value gain/(loss) is recognized in P/L.
 Consolidated statement of profit or loss and other comprehensive income
- Equity accounting as an associate to the date the parent achieves control.
- Remeasure the investment to fair value at the date the parent achieves control. Journal Entry would be as follow:
Debit: Equity Investment XXXX
Credit: Fair Value Gain / (Loss) – P/L XXXX
- Consolidate the results as a subsidiary from the date the parent achieves control.
 Consolidated statement of financial position
- Calculate goodwill at the date the parent achieves control as follow:
Add. Fair Value of investment previously held XXXX
Add. Fair Value of Consideration transferred XXXX
Add. Non-Controlling Interest XXXX
Less. FV of Identifiable Net Assets of subsidiary (at the date of control) (XXX)
Goodwill / (Bargain Purchase Gain) XX / (XX)
- Consolidate goodwill, assets, liabilities and NCI of the subsidiary at the year end. Journal Entry at the date the parent
achieves control is as follow:
Debit: Goodwill XXXX
Debit: Net Assets XXXX
Credit: FV of investment previously held XXXX
Credit: FV of Consideration transferred XXXX
Credit: Non-Controlling Interest XXXX
Compiled by: Murtaza Quaid, ACA
 CONSOLIDATED FINANCIAL STATEMENTS

(4) Further Acquisition (Example, from 60% to 80% shareholding)

In substance, there has been no acquisition because the entity is still a subsidiary. Instead this is a transaction between
group shareholders (i.e. the parent is buying shares from the non-controlling interests).

 Consolidated statement of profit or loss and other comprehensive income

- Consolidate as a subsidiary in full for the whole period
- Share of NCI before and after further acquisition, would be based on original NCI% and revised NCI%
respectively as follow:
NCI at acquisition (when control achieved) XXXX
Share of NCI in post-acquisition reserves to date of further acquisition (as per original NCI%) XXXX
NCI at date of further acquisition (A) XXXX
Decrease in NCI on date of further acquisition (A x % shareholding acquired / Original NCI%) XXXX
NCI after further acquisition XXXX
Share of NCI in post-acquisition reserves from further acquisition to year end (as per revised NCI%) XXXX
NCI at year end XXXX

 Consolidated statement of financial position

- Consolidate goodwill, assets, liabilities and NCI (as calculated above) of the subsidiary at the year end.
Journal Entry at the further acquisition date is as follow:

Debit: Non-Controlling Interest (NCI) XXXX

Debit: Consolidated R/E (with adjustment to equity) XXXX Adjustment to equity (post it to the
Credit: Cash / Consideration paid XXXX parent’s column in the consolidated
retained earnings working)
Compiled by: Murtaza Quaid, ACA
 Step Acquisition - Simple Investment to Associate
This scenario is not specifically covered under any of IFRS 3 Business Combinations,
IFRS 10 Consolidated Financial Statements or IAS 28 Investments in Associates and
Joint Ventures. Interpretative guidance from Deloitte (2008: p99) suggests that there
are two possible treatments in the group accounts:

a) Follow the IFRS 3 principles for b) Follow the IAS 28 principles for
step acquisitions equity accounting
Remeasure the existing investment to Record both the original investment
fair value on the date significant and the new investment at cost on the
influence is achieved with any basis that IAS 28 (para. 10) states,
corresponding gain or loss recognised ‘under the equity method, on initial
in Profit or (loss) or other recognition the investment in an
comprehensive income (OCI) associate or a joint venture is recognised
(depending upon the classification of at cost’.
investment under IFRS 9)

Compiled by: Murtaza Quaid, ACA

 CONSOLIDATED FINANCIAL STATEMENTS

Disposal of Subsidiary’s Shares

Full disposal Partial Disposal

Where Control is
Where Control is Lost
Retained
 For example,
80% to 60%
shareholding
Subsidiary to Subsidiary to
Simple Investment Associate

 For example,  For example,

80% to 10% 80% to 30%
shareholding shareholding

Compiled by: Murtaza Quaid, ACA

 CONSOLIDATED FINANCIAL STATEMENTS

(1) Full Disposal of Subsidiary’s Share

 Consolidated statement of profit or loss and other comprehensive income

- Consolidate the results to the date of disposal as “Discontinued Operations”

- Show a group profit or loss on disposal in “Discontinued Operation” to be calculated as follow:

Fair value of consideration received XXXX

Less: Net Assets of Subsidiary (XXX)
Less: Goodwill (XXX)  Carrying amount on the date of disposal
Add. Non-Controlling Interest (NCI) XXXX
Gain / (Loss) on disposal – P/L XX / (XX)

 Consolidated statement of financial position

- No consolidation of goodwill, assets, liabilities and NCI of the subsidiary as there is no subsidiary at the year end.
Journal Entry at the disposal date is as follow:

Debit: Fair value of consideration received XXXX

Debit: Non-Controlling Interest (NCI) XXXX
Credit: Net Assets of Subsidiary XXXX
Credit: Goodwill XXXX
Credit: Gain / (Loss) on disposal – P/L XXXX

Compiled by: Murtaza Quaid, ACA

 CONSOLIDATED FINANCIAL STATEMENTS

(2) Partial Disposal of Subsidiary’s Share  Control is Lost (Subsidiary to Simple Investment)
In substance, the parent has ‘sold’ a subsidiary and ‘purchased’ an investment.
 Consolidated statement of profit or loss and other comprehensive income
- Consolidate the results to the date of disposal as “Discontinued Operations”
- Show a group profit or loss on disposal in “Discontinued Operation” to be calculated as follow:
Fair value of consideration received XXXX
Fair value of any investment retained XXXX
Less: Net Assets of Subsidiary (XXX)
Less: Goodwill (XXX)  Carrying amount on the date of disposal
Add. Non-Controlling Interest (NCI) XXXX
Gain / (Loss) on disposal – P/L XX / (XX)
- Treat as an investment in equity instruments under IFRS 9 at FVPL or FVOCI.
 Consolidated statement of financial position
- No consolidation of goodwill, assets, liabilities and NCI of the subsidiary as there is no subsidiary at the year end.
Journal Entry at the disposal date is as follow:
Debit: Fair value of consideration received XXXX
Debit: Equity Investment at Fair value (IFRS 9) XXXX
Debit: Non-Controlling Interest (NCI) XXXX
Credit: Net Assets of Subsidiary XXXX
Credit: Goodwill XXXX
Credit: Gain / (Loss) on disposal – P/L XXXX

Compiled by: Murtaza Quaid, ACA

 CONSOLIDATED FINANCIAL STATEMENTS

(3) Partial Disposal of Subsidiary’s Share  Control is Lost (Subsidiary to Associate)

In substance, the parent has ‘sold’ a subsidiary and ‘purchased’ an associate.
 Consolidated statement of profit or loss and other comprehensive income
- Consolidate the results to the date of disposal as “Discontinued Operations”
- Show a group profit or loss on disposal in “Discontinued Operation” to be calculated as follow:
Fair value of consideration received XXXX
Fair value of any investment retained XXXX
Less: Net Assets of Subsidiary (XXX)
Less: Goodwill (XXX)  Carrying amount on the date of disposal
Add. Non-Controlling Interest (NCI) XXXX
Gain / (Loss) on disposal – P/L XX / (XX)
- Treat as an associate thereafter (i.e. equity account)
 Consolidated statement of financial position
- No consolidation of goodwill, assets, liabilities and NCI of the subsidiary as there is no subsidiary at the year end.
Journal Entry at the disposal date is as follow:
Debit: Fair value of consideration received XXXX
Debit: Investment in Associate (IAS 28) XXXX
Debit: Non-Controlling Interest (NCI) XXXX
Credit: Net Assets of Subsidiary XXXX
Credit: Goodwill XXXX
Credit: Gain / (Loss) on disposal – P/L XXXX

Compiled by: Murtaza Quaid, ACA

 CONSOLIDATED FINANCIAL STATEMENTS

(4) Partial Disposal of Subsidiary’s Share  Control is Retained

 Consolidated statement of profit or loss and other comprehensive income

- Consolidate as a subsidiary in full for the whole period

- Share of NCI before and after disposal, would be based on original NCI% and revised NCI% respectively as
follow:

NCI at acquisition (when control achieved) XXXX

Share of NCI in post-acquisition reserves to date of disposal (as per original NCI%) XXXX
NCI at date of disposal (A) XXXX
Increase in NCI on date of disposal (A x % shareholding disposed / Original NCI%) XXXX
NCI after disposal XXXX
Share of NCI in post-acquisition reserves from disposal date to year end (as per revised NCI%) XXXX
NCI at year end XXXX

 Consolidated statement of financial position

- Consolidate goodwill, assets, liabilities and NCI (as calculated above) of the subsidiary at the year end.
Journal Entry at the disposal date is as follow:

Debit: Cash / Consideration received XXXX

Credit: Non-Controlling Interest (NCI) XXXX
Credit: Consolidated R/E (with adjustment to equity) XXXX Adjustment to equity (post to the
parent’s column in the consolidated
retained earnings working)
Compiled by: Murtaza Quaid, ACA
 CONSOLIDATED FINANCIAL STATEMENTS

Accounting Treatment in Parent’s Separate Financial Statements

 The treatment in the parent’s separate financial statements follows the legal form of the
transaction – i.e. shares have been sold. Therefore, the treatment in the parent’s separate
financial statements is the same whether or not control is lost.
 In the parent’s separate financial statements, investments in subsidiaries are held at cost or at fair
value under IFRS 9.
 Consequently, the gain or loss on disposal is different from the group gain or loss on disposal:
Fair value of consideration received XXXX
Less. Carrying amount of investment disposed of (XXX)
Gain/(loss) XX / (XX)

Compiled by: Murtaza Quaid, ACA

 CONSOLIDATED FINANCIAL STATEMENTS

Deemed Disposal

 A ‘deemed’ disposal occurs when a subsidiary issues new shares and the parent does not take up
all of its rights such that its holding is reduced.
 In substance this is a disposal and is therefore accounted for as such. The percentages owned by
the parent before and after the subsidiary issues new shares must be calculated and accounted for
accordingly:
 Where control is Lost
- Subsidiary to Simple Investment
- Subsidiary to Associate
 Where control is Retained

Compiled by: Murtaza Quaid, ACA

 CONSOLIDATED FINANCIAL STATEMENTS

Complex Group

Vertical Group / Sub-Subsidiary Mixed Group / D-Shaped Group

Co. A Co. A
40%
75% 75%

Co. B Co. B Co. C

20%
60%

Co. C

Compiled by: Murtaza Quaid, ACA

 CONSOLIDATED FINANCIAL STATEMENTS

Vertical Group / Sub-Subsidiary

 A subsidiary is an entity controlled by another entity (its parent company)

either directly or indirectly through one or more intermediaries.

 A group structure in which a parent has a subsidiary and that subsidiary is

itself a parent of another subsidiary (sub-subsidiary of ultimate parent) is Co. A
known as a vertical group.

 It is the control and not ownership that is relevant in deciding whether a 75%
company is consolidated in a group.

 In the example, Company A is referred to as the ultimate parent company Co. B

of Company C. Even if the effective holding is less than 50% of sub-
subsidiary, the results are consolidated as far as subsidiary of a parent
controls sub-subsidiary. 60%

 The main subsidiary (Company B) is consolidated by the parent (Company

A) in the usual way. Co. C

 The sub-subsidiary (Company C) is also consolidated by the parent

(Company A) in the usual way using the effective holding with one further
adjustment. The cost of investment in Sub-Subsidiary (Company C) is split.
Parent’s share is used in the goodwill working and the balance is charged to
the non-controlling interest. Compiled by: Murtaza Quaid, ACA
 Vertical Group / Sub-Subsidiary

Date of Acquisition of the Sub-Subsidiary

 A subsidiary must be consolidated from the date of acquisition.

 The date of acquisition of the sub-subsidiary is the later of:
 the date on which the main subsidiary was purchased by the parent and
 the date on which the sub-subsidiary was purchased by the main subsidiary.

Example 1 Example 2

Co. Co.
A A
75% Acquisition Dates = 1 Jan 20X1 75% Acquisition Dates = 1 Jan 20X3

Co. Co.
B B
60% Acquisition Dates = 1 Jan 20X3 60% Acquisition Dates = 1 Jan 20X1

Co. Co.
C C
 CONSOLIDATED FINANCIAL STATEMENTS

Mixed Group / D-Shaped Group

 In a mixed group, the parent has both direct and indirect interests in
the sub-subsidiary.
Co. A
 In the example of a mixed group, Company A has two interests in 40%
Company C:
75%
 It has a direct interest in Company C, with the shares that it owns in
Company C.
Co. B Co. C
 It also has an indirect interest in Company C, through its control of
Company B, which also owns shares in Company C. 20%
 The group interest in the Company C is the sum of the direct interest
and the indirect interest in Company C as follows:
 Company A’s direct holding in Company C 40%
 Company A’s indirect holding in Company C (60% x 20%) 12%
Company A’s effective holding in Company C 52%
Non-controlling interest in T (100% - 52%) 48%

 The same rules apply to mixed groups as they do to vertical groups.

Compiled by: Murtaza Quaid, ACA

 Mixed Group / D-Shaped Group

Date of Acquisition of the Indirect Subsidiary

Example 1 Example 2
Co. A 30% Co. A 30%
1 May 20X2 1 May 20X2
80% 80%
1 May 20X1 1 May 20X4

Co. B Co. C Co. B Co. C

45% 45%
1 May 20X3 1 May 20X1

 Co. A obtains control of Co. B on 1 May 20X1.  Co. A achieves significant influence over Co. C on 1 May
20X2.
 Co. A obtains control of Co. C on 1 May 20X3 when Co.
B acquires its stake in Co. C.  Co. A obtains control of Co. B on 1 May 20X4. Thus Co. A
also obtains control of Co. C due to gaining indirect
 From 1 May 20X2 to 1 May 20X3, Co. C is an associate control over Co. B’s holding in Co. C.
of Co. A.
 From 1 May 20X2 to 1 May 20X4, Co. C is an associate of
 From 1 May 20X3 onwards, Co. C is a subsidiary of Co. Co. A.
A and Co. A has an effective holding of 66% (30% +
(80% × 45%)) in Co. C.  From 1 May 20X4 onwards Co. C is a subsidiary of Co. A.
 JOINT ARRANGEMENTS

Definitions
 Joint arrangement: An arrangement of which two or more parties
have joint control.
 Joint control: The contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant
activities require unanimous consent of the parties sharing control.

A joint arrangement has the following characteristics:

a) The parties are bound by a contractual arrangement
b) The contractual arrangement gives two or more of those parties joint control of the
arrangement.

Joint arrangements may take the form of either:

a) Joint operations
b) Joint ventures.
The key distinction between the two forms is based upon the parties’ rights and obligations under
the joint arrangement.

Compiled by: Murtaza Quaid, ACA

 Joint Operations v/s Joint Ventures

Joint Operations Joint Ventures

Definition: A joint arrangement whereby the

Definition: A joint arrangement whereby the
parties that have joint control of the arrangement
parties that have joint control of the arrangement
have rights to the assets, and obligations for the
have rights to the net assets of the arrangement.
liabilities, relating to the arrangement.

 Under these definitions, the accounting treatment is determined based on

the substance of the joint arrangement.
 If no separate entity has been created, the investor should separately
recognise in its financial statements the direct rights it has to the assets and
the obligation it has for liabilities under that arrangement.
 If a separate vehicle (entity) is created, the venturer accounts for its share of
that entity using equity accounting.

Not structured through a Structured through a

separate vehicle separate vehicle Entity considers:
 Legal form
 Terms of the contractual
Joint operation Joint venture arrangement
(line by line accounting) (equity accounting)  (Where relevant) other
facts and circumstances
Compiled by: Murtaza Quaid, ACA
 Accounting Treatment

Joint Operations Joint Ventures

Accounting Treatment
Accounting Treatment
Investor’s Separate Financial Statements
Investor’s Separate Financial Statements
 Under IFRS 3, Investment in Joint Operations is accounted for as
follow:  Investments in joint ventures are carried
in the investor’s separate financial
 Acquisition costs are expensed to profit or loss as incurred statements:
 The identifiable assets and liabilities of the joint operation  At cost;
are measured at fair value  At fair value (IFRS 9); or
 The excess of the consideration transferred over the fair  Using the equity method (IAS 28)
value of the net assets acquired is recognised as goodwill.
 Where a joint venturer has no
 At the reporting date, the separate financial statements of joint subsidiaries, the equity method must be
operator will recognise: used.
 its share of assets held jointly
Consolidated Financial Statements
 its share of liabilities incurred jointly
 Joint ventures are accounted for using
 its share of revenue from the joint operation the equity method in the consolidated
 its share of expenses from the joint operation financial statements in exactly the same
way as for associates.
Consolidated Financial Statements
 No adjustments are necessary on consolidation as the figures are
already incorporated correctly into the separate financial
statements of the joint operator.

Compiled by: Murtaza Quaid, ACA

 CONSOLIDATED FINANCIAL STATEMENTS

Fair Value of the Identifiable Assets Acquired & Liabilities Assumed of Subsidiary

 On acquisition, the subsidiary’s assets and liabilities must be recognized and measured at their
acquisition date fair value except in limited stated cases.

Measurement period
 Initial accounting for goodwill may be determined on a provisional basis and must be finalized
by the end of a Measurement Period.
 Measurement period ends as soon as the acquirer receives the information it was seeking about
facts and circumstances that existed at the acquisition date.
 However, measurement period shall not exceed one year from the acquisition date.
 During the measurement period new information obtained about facts and circumstances that
existed at the acquisition date might lead to the adjustment of provisional amounts or
recognition of additional assets or liabilities with a corresponding change to goodwill.
 Any adjustment restates the figures as if the accounting for the business combination had been
completed at the acquisition date.

Compiled by: Murtaza Quaid, ACA

 CONSOLIDATED FINANCIAL STATEMENTS

Fair Value of the Identifiable Assets Acquired & Liabilities Assumed of Subsidiary

Measurement at
Item Measurement at Reporting Date
Acquisition Date

Lower of:
Inventory Fair Value  Costs (i.e. Fair Value at Acquisition Date)
 Net Realizable Value

As per the Group Policy, i.e.

Property, Plant
Fair Value  Cost Model
and Equipment
 Revaluation Model

As per the Group Policy, i.e.

Investment
Fair Value  Cost Model
Property
 Fair Value Model

Financial Asset Fair Value As per IFRS 9

Financial Liability Fair Value As per IFRS 9

Compiled by: Murtaza Quaid, ACA

 CONSOLIDATED FINANCIAL STATEMENTS

Fair Value of the Identifiable Assets Acquired & Liabilities Assumed of Subsidiary

 Exceptions to the recognition and/or measurement principles in IFRS 3 are as follows.

Measurement at Acquisition
Item Measurement at Reporting Date
Date

Higher of:
 Fair Value at Acquisition Date
Contingent liabilities Fair Value
 Amount to be recognized under
IAS 37

Indemnification assets
(Amounts recoverable Valuation is the same as the valuation of contingent liability
relating to a contingent indemnified less an allowance for any uncollectable amounts
liability)

Reacquired rights (For The asset recognised is amortised

Fair value is based on the
example, a license granted over the remaining contractual
remaining term, ignoring
to the subsidiary before it period of the contract in which the
the likelihood of renewal
became a subsidiary) right was granted.

Compiled by: Murtaza Quaid, ACA

 CONSOLIDATED FINANCIAL STATEMENTS

Fair Value of the Identifiable Assets Acquired & Liabilities Assumed of Subsidiary

 Exceptions to the recognition and/or measurement principles in IFRS 3 are as follows.

Measurement at
Item Measurement at Acquisition Date
Reporting Date
Deferred tax assets/liabilities As per IAS 12 As per IAS 12
Employee benefit assets/
As per IAS 19 As per IAS 19
Liabilities
Share-based payment As per IFRS 2 As per IFRS 2
As per IFRS 5
Assets held for sale As per IFRS 5
 At fair value less costs to Sell

As per IFRS 16
 Measure the lease liability at the present
value of the remaining lease payments as
Leases (Subsidiary is Lessee) if the acquired lease were a new lease at As per IFRS 16
the acquisition date.
 Measure the right-of-use asset at the same
amount as the lease liability,)

Compiled by: Murtaza Quaid, ACA