The Essentials of Group Accounts

About

Including the latest developments on IFRS (International Financial Reporting Standards) that impact group accounts.

Do you know...
• When a set of consolidated accounts needs to be prepared?
• The impact of revaluing your subsidiary’s assets?
• How to account for and treat positive and negative goodwill?
• How to treat the minority interest portion of a subsidiary’s dividend?
• What to do when you acquire or dispose of a subsidiary in the year?
• The latest developments in IFRS No. 3 on business combinations?
• The differences between IFRS No. 3 and FRS- 36, FRS-37, and FRS-38?

Accounting for groups of companies is a complex task that demands a clear understanding of the methodology of consolidation and a sound knowledge of the steps and techniques required to produce group accounts. This two-day seminar addresses both these requirements by providing a guide as to why and how consolidated accounts should be produced.

Learning outcomes
• Learn how to prepare a set of consolidated financial statements for groups and entities
• Demonstrate competence in applying consolidated accounting principles for complex business combinations
• Understand minority interest and multi-tier groups and equity accounting
• Obtain a complete update on recent developments including FRS-36, FRS-37, FRS-38 and IFRS No.3
• Grasp the principles of equity accounting and account for inter- company investments using the equity method
• Address some of the problems faced by multinational corporations when preparing group financial statements

Who should attend
• Finance staff of all levels who need to understand the principles of group accounting
• Internal and external auditors who need to verify the appropriateness of the consolidated accounts
• Financial Controllers who need to revise the principles of group accounting

Training methodology:
This intensive two-day training programme will combine tutorial sessions with practical examples, allowing participants to gain first hand experience of effective group accounting principles and practices

Outline

Day One

8.30 Registration

Understanding the general principles of group accounts
• Understanding the concept of a group of companies and consolidated accounts
• Subsidiaries, associated companies and jointly controlled companies
• Why prepare group accounts?
• When should group accounts be prepared?
• Analysis of the single entity concept
• Concepts of control vs ownership
• Who are the minority interests?
• Group accounting exemptions
• Consolidation options:
  - Purchase accounting
  - Merger accounting
  - Associates and joint ventures

Guidelines for preparing consolidated financial statements
• Basic principles for preparation of consolidated financial statements
• Remeasurement of assets and liabilities of subsidiaries
• Offsetting investments and net assets
• The minority interest
• Additions to and selling of investments in a subsidiary
• Offsetting rights and obligations
• Application of equity method for investments in non-consolidated subsidiaries and affiliates

Guidelines for preparing consolidated income statements
• Basic principles for preparing consolidated income statements
• Eliminating inter-company transactions among consolidated entities
• Eliminating unrealised gains and losses
• Displaying a consolidated income statement with stages of operating income, recurring income and net income

Guidelines for preparation of consolidated statements of retained earnings
• Calculating changes in consolidated retained earnings
• Displaying a consolidated statement of retained earnings

Day Two

Consolidation of a subsidiary
• Basic elimination entries
• Revaluation of a subsidiary’s assets
• Goodwill on consolidation
• Minority interests
• Inter-company transactions
• Subsidiary losses
• Acquisition of additional shares in subsidiaries
• Sales of a subsidiary and part of a subsidiary
• Vertical groups
• Foreign subsidiary

Summarising the differences between FRS-36, FRS-37, FRS-38 and IFRS No. 3
Contrasting IFRS No. 3 and FRS-36, FRS-37 and FRS-38.
• FRS-36 Accounting for Acquisitions resulting in Combinations of Entities or Operations
• FRS-37 Consolidating Investments in Subsidiaries
• FRS-38 Accounting for Investments in Associates
• IFRS No. 3 Business Combinations
• What are the main implications for NZ entities of these changes?
• Recognising all business combinations at fair value
• Definition on FRS-36 for intra-group reconstructions
• Accounting for fair value rather than carrying values
• Presenting equity accounted earnings as a single line item in the statement of financial performance

Methods of accounting for business combinations in group accounts
The definition of a business combination is “The bringing together of separate entities or operations of entities into one reporting entity”.
• Defining a business combination involving entities under common control
• Defining a reporting entity
• Identifying when reverse acquisition accounting is appropriate
• Costs of registering and issuing equity instruments
• Treatment of costs of issuing or arranging financial liabilities
• When are the principles of step acquisition accounting required to be applied?

Accounting for goodwill and intangible assets acquired in a business combination
• Understanding the principles of impairment testing
• Accounting for previously unrecognised intangible assets
• Aligning goodwill impairment test with impairment test for other assets
• Disposal of a business within a group
• Understanding the term “negative goodwill”

Facilitator

In-house Training

Prices and Registration

* Early bird price available when you register and pay before the dates listed.