Consolidations, Joint Arrangements and Investments in Associates (IFRS 10/AASB 10/IFRS 11/AASB 11/IAS 28/AASB 128)

Corporate Reporting Insights

BDO's monthly newsletter, Corporate Reporting Insights, keeps you up to date with the latest Australian and global developments in corporate financial and sustainability reporting.

• Exemptions from preparing consolidated financial statements (June 2022)
• Accounting for associates ​(July 2021)
• Accounting for joint arrangements​ (June 2021)
• Consolidated financial statements – when are they required?​ (May 2021)
• ​Annual improvements 2015-2017 cycle - changes to IFRS 3 Business Combinations. IFRS 11 Joint Arrangements. IAS 12 Income Taxes and IAS 23 Borrowing Costs. (February 2018)
• IASB clarifies accounting for the sale or contribution of assets between an investor and its associate or joint venture (October 2014)
• Changes to IFRS 11 – Accounting for acquisitions of interests in joint operations (May 2014)
• Consolidation guidance for NFPs (Nov 2013)
• Investment entity consolidation exemption finally approved in Australia ​(September 2013)
• Will new consolidation and joint arrangement standards change your financial statements? (May 2013)
• New investment entity standard (November 2012)
• New consolidation, joint arrangements and fair value standards – Storm in a teacup? – continued (October 2012)
• New consolidation, joint arrangements and fair value standards – Storm in a teacup? (September 2012)​.

BDO Global IFRS Resources

The following publications have been produced by the BDO Global IFRS group:

► IFRS at a Glance

A high level overview of International Financial Reporting Standards (IFRSs), including International Accounting Standards and Interpretations.

• IFRS 10 Consolidated Financial Statements
• IFRS 11 Joint Arrangements 
• IFRS 12 Disclosure of Interests in Other Entities
• IAS 27 Separate Financial Statements
• IAS 28 Investments in Associates and Joint Ventures​​
• IFRIC 5 Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds
• IFRIC 17 Distribution of Non-Cash Assets to Owners.

►IFRS in Practice

Practical information about the application of key aspects of IFRS, including industry specific guidance.

• IFRS 10 Consolidated Financial Statements (2022)
• IFRS 11 Joint Arrangements (2022).

IFRIC agenda decisions

IFRS Interpretations Committee (the Committee) agenda decisions are those issues that the Committee decided not to take onto its agenda. Although not authoritative guidance, in practice they are regarded as being highly persuasive, and all entities reporting under IFRS should be aware of these decisions because they could impact the way particular transactions and balances are accounted for. Agenda decisions on this topic include:

SEPARATE FINANCIAL STATEMENTS

• Investment in subsidiary accounted for at cost: Step acquisition – IAS 27 (January 2019) and FAQ
• Investment in subsidiary accounted for at cost: Partial disposal – IAS 27 (January 2019) and FAQ
• Accounting by joint operator in its separate financial statements – IFRS 11 and IAS 27 (March 2015) and FAQ
• Group reorganisation in separate financial statements – IAS 27 (September 2011) and FAQ
• Combined financial statements and redefining the reporting entity – IAS 27 (January 2010)
• Transaction costs for non-controlling interests – IAS 27 (July 2009) and FAQ
• Separate financial statements issued before consolidated financial statements (March 2006) and FAQ.

INVESTMENT IN ASSOCIATES

• Contributing PPE to an associate – IAS 28 (January 2018) and FAQ
• Fund manager’s assessment of significant influence – IAS 28 (March 2017) and FAQ
• Impairment of investments in associates in separate financial statements – IAS 28 (January 2013) and FAQ.

INVESTMENT ENTITIES

• Investment entities and subsidiaries – IFRS 10 (March 2017) and FAQ
• Investment entity amendments – definition of investment-related services or activities – IFRS 10 (March 2014) and FAQ.

 CONSOLIDATIONS

• Accounting for loss of control transactions – IFRS 10 and IFRS 11 (July 2016) and FAQ
• Identification of acquirer and parent in stapling arrangements - IFRS 3 and IFRS 10 (May 2014) and FAQ
• Classification of puttable instruments that are non-controlling interests - IFRS 10 and IAS 32 (November 2013) and FAQ
• Transition – impairment, foreign exchange and borrowing costs – IFRS 10 (November 2013) and FAQ
• Effect of protective rights in an assessment of control (September 2013) and FAQ
• Non-cash acquisition of a non-controlling interest by a controlling shareholder in consolidated financial statements (January 2013) and FAQ.

 JOINT OPERATIONS

• Sale of output by a joint operator (March 2019) and FAQ
• Liabilities in relation to a joint operator’s interest in a joint operation​ (March 2019) and FAQ
• Accounting for loss of control transactions – IFRS 10 and IFRS 11 (July 2016) and FAQ
• Remeasurement of previously held interests (January 2016) and FAQ
• Accounting by joint operator in its separate financial statements – IFRS 11 and IAS 27 (March 2015) and FAQ
• Recognition of revenue by a joint operator – IFRS 11 (March 2015) and FAQ
• Classification of joint arrangements – assessment of ‘other facts and circumstances’ – IFRS 11 (March 2015) and FAQ
• Classification of joint arrangements: application of ‘other facts and circumstances’ – IFRS 11 (March 2015) and FAQ
• Accounting by the joint operation that is a separate vehicle in its financial statements – IFRS 11 (March 2015) and FAQ
• Joint operator’s share of output purchased differs from its share of ownership interest – IFRS 11 (March 2015) and FAQ
• Joint arrangements with similar features that are classified differently – IFRS 11 (March 2015) and FAQ
• Transition – impairment, foreign exchange and borrowing costs – IFRS 10 (November 2013) and FAQ.

DISCLOSURE OF INTERESTS IN OTHER ENTITIES

• Disclosure for a subsidiary with a material non-controlling interest (January 2015) and FAQ
• Disclosure of summarised financial information about material joint ventures or associates (January 2015) and FAQ.

Online training resources

Improve your knowledge of accounting standards by purchasing our online training resources on a variety of financial reporting topics. Resources available on this topic include:

SEMINARS - pre-recorded two-hour webinars that provide a high-level overview of the accounting standard, as well as a question and answer case study booklet:

• Consolidations  
• Investment in Associates.

ELEARNING - self-paced interactive web-based eLearning modules that provide an in-depth understanding of the key aspects of the accounting standard and requires participants to read and answer questions relating to the content:

• Consolidated financial statements
• Joint arrangements
• Associates.