IFRS Monitoring Committee Knowledge Sharing on [Draft] International Financial Reporting Standards Exposure Draft: Accounting Proposed amendments to IFRS 11 1 Exposure Draft: Acquisition of an Interest in a Joint Operation Accounting Framework: Qualitative Characteristic of Accounting Information – Reliability, Relevance, and Comparability.
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07 ED Acquisition of an Interest · 2015-03-09 · Entities; IAS28 (2011) Investments in Associates and Joint Ventures Effective Date: IFRS11 (2011) Joint Arrangements; IFRS12 (2011)
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IFRS Monitoring Committee
Knowledge Sharing on [Draft] International
Financial Reporting Standards
Exposure Draft:Accounting
Proposed amendments to IFRS 11
1
Exposure Draft:
Acquisition of an Interest in
a Joint Operation
Accounting Framework: Qualitative
Characteristic of Accounting
Information –Reliability,
Relevance, and Comparability.
Comment Letter
FAP
Thailand
Role of FAP in Global Arena
ED/2012/7 Acquisition of an Interest in a Joint Operation is a Proposed Amendment
IAS 31 defines a joint venture as a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control.
1• Jointly
Controlled Operations
2• Jointly
Controlled
7
A joint venture is a contractual arrangement whereby two or more parties undertakean economic activity that is subject to joint control. These are of three types:• Jointly controlled operations
• Jointly controlled assets
• Jointly controlled entities.
Joint control exists only when the strategic financial and operating decisions relating to the economic activity require the unanimous consent of the parties sharing control.
The objective of the proposed amendment is to introduce guidance
on the accounting, by a joint operator, for the acquisition of an interest in a joint operation, as defined in IFRS11
Joint Arrangements, in which the activity of the joint operation
constitutes a business, as defined in IFRS3 Business Combinations.
…the activity of the joint operation constitutes
a business….
IFRS3 Business Combinations
Limited Scope Project
INPUTB
U
S
10
PROCESS
OUTPUT
S
I
N
E
S
S
Basis for Conclusions
❶
❷
❸
Diversity in practices related to the acquisition of interest in a joint operations
Basis for Conclusions
GoodwillGoodwill
CostsCosts
DTA & DTLDTA & DTL
IFRS3 vs. Others
Gain on bargain purchase
IAS12
Area omitted by both IAS31
and IFRS11.
Relevant principles in IFRS3
Basis for Conclusions
Misstatement of assets and liabilities
Inconsistency in partial application of
IFRS3
Impairment of assets may result in the future.
Basis for Conclusions
Limited scope project, not a major change in principle.
Basis for Conclusions
Prospective (as opposed to retrospective) application is proposed to avoid hindsight bias.
A
L
REV
REV
EXP
Details on relevant principles on business combinations accounting Details on relevant principles on business combinations accounting are discussed in B33A-B33B.
EXP
Amendment proposed:
IFRS3 application
Fair value
measurement
IFRS13 (2011)
Acquisition-related
costs
Deferred tax assets
and liabilities
Goodwill
∆IFRS3 (2009)
Unidentifiable intangible assets
Early adoption
is permitted
Prospective
application
Fair value
measurement
Prospective
Application
IFRS Monitoring Committee
IFRS3 application �
�
IFRS Monitoring Committee
Application to the acquisition of an interest in a joint operation on its formation �