Course detail

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Contents

• Introduction
• Prerequisites
  
• Course Level
  
• Topics
  
• Course Benefits
  
• Teaching Method
  
• Continuing Professional Education
  
• Venue
  
  

Introduction

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Accounting for business combinations and reporting consolidated financial statements poses unique challenges for IFRS preparers. This three-day program provides a comprehensive understanding of and hands-on practice in applying the IFRS rules on business combinations and the requirements for consolidating subsidiaries and reporting associates and joint ventures in the group financial statements.

Our expert instructors provide an in-depth review of the IFRS standards related to business combinations and consolidated reporting, including:

• IFRS 3 Business Combinations

• IAS 27 Consolidated and Separate Financial Statements

• IAS 28 Investments in Associates

• IAS 31 Interests in Joint Ventures

• IAS 21 The Effects of Changes in Foreign Exchange Rates (as it relates to consolidation of foreign operations)

• IAS 39 Financial instruments (as it relates to the classification and measurement of financial assets)

Utilizing illustrative examples and model financial statements, the theory and practical application of the acquisition method of accounting for business combinations is demonstrated in an interactive group environment. The program also gives delegates a sound understanding of the requirements and methodology for consolidations, proportionate consolidations, and consolidation-related applications of the equity method under IFRS, including foreign operations with a functional currency different from that of the parent or investor.

The course answers questions such as:

• What is included and excluded when calculating the consideration transferred in a business combination?

• How are contingent payments, subsequent fair value adjustments, contingent liabilities and intangible assets treated in a business combination?

• How are goodwill and non-controlling interests measured?

• What rules apply to the consolidation of special-purpose entities?

• What adjustments are needed when consolidating equity-method investments?

• How are proportionately consolidated financial statements prepared?

Prerequisites

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Basic understanding of accounting for business combinations and consolidations. No advance preparation is required for this course.

Course Level

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Overview

Topics

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• Acquisition accounting – IFRS 3
• Identifying a business combination
• Identifying the acquirer
• Determining the acquisition date and consideration transferred
• Recognizing and measuring identifiable assets acquired, liabilities assumed, and non-controlling interest
• Recognition principle
• Measurement principle
• Exceptions to the recognition or measurement principles
• Recognizing and measuring goodwill or a gain from a bargain purchase
• Bargain purchases
• Consideration transferred
• Contingent consideration
• Testing goodwill for impairment
• Business combination achieved in stages
• Business combination achieved without the transfer of consideration
• Measurement period
• Subsequent measurement and accounting
• Reacquired rights
• Contingent liabilities
• Indemnification assets
• Contingent consideration
• Disclosures
• Consolidated financial statements – subsidiaries and associates
• Determining control and significant influence
• Consolidation requirements and procedures
• Equity accounting requirements and procedures
• Accounting for non-controlling interests
• Accounting for changes in ownership interests
• Non-coterminous reporting dates
• Alignment of accounting policies
• Consolidating special purpose entities
• Interests in joint ventures
• Identifying joint ventures
• Consolidation effects relating to each type of joint venture
• Application of the proportional consolidation method
• Financial assets
• Classification and measurement
• Consolidating financial statements of a foreign operation
• Hedge accounting of a net investment in a foreign operation
• Presentation and disclosure requirements
• Separate financial statements of parent entities, subsidiaries, venturers and investors
• New Developments
• Exposure Draft: Joint Arrangements
• Exposure Draft: Replacement of IAS 27
• Exposure Draft: Disclosure of unconsolidated SPEs and structured entities
• IFRS 9: Financial Instruments – classification and measurement of financial assets
• Exposure Draft: Conceptual Framework – The Reporting Entity

Course Benefits

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• Differentiate between the different levels of investment and identify the appropriate accounting treatment
• Perform a purchase price allocation exercise and calculate goodwill by applying the rules in IFRS 3 Business Combinations
• Evaluate the impact of contingent payments and implement the special recognition and measurement rules for contingent liabilities
• Demonstrate an understanding of IAS 38 by performing an impairment test on goodwill
• Complete consolidated financial statements for a parent and subsidiary in accordance with IAS 27
• Perform equity accounting for an associate by applying IAS 28
• List the circumstances in which special purpose entities are required to be consolidated
• Translate a foreign operation, calculate the resulting exchange difference and determine the correct accounting treatment
• Identify the three forms of joint venture and apply the appropriate accounting rules for each one
• Prepare consolidated financial statements applying the two alternative treatments available for measuring non-controlling interests
• Apply the hedge accounting rules of IAS 39 for the hedge of a net investment in a foreign operation
• Differentiate between the current requirements and proposed new treatments for each of the above areas

Teaching Method

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• Live group instruction with active participation encouraged
• Review of the general requirements of IFRS 3 Business Combinations
• Illustration of consolidation requirements and methodology, including the application of rules for non-controlling interests
• Comparative demonstration of consolidation issues relating to associates and joint ventures
• Review of the accounting and disclosure requirements for foreign operations
• Extensive hands-on case studies completed in an interactive group environment to demonstrate key points and practical application
• All participants receive a comprehensive binder containing copies of the presentation slides, handouts and other course materials

Continuing Professional Education (CPE)

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24 hours

Venue

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All of our Dubai seminars take place in 4 star professional conference facilities, usually in city-centre downtown hotels like the Marriott, Sheraton or Hilton brands.

Detailed Joining Instructions are sent to all registered delegates by email approximately one month before the event. The Joining Instructions will confirm exact venue details and nearby (or onsite) hotel recommendations with bedroom rates where available.

Coffee and lunch will be provided.