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Principles
of Group
Accounting
under IFRS
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Principles
of Group
Accounting
under IFRS
by Andreas Krimpmann
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This edition first published 2015
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Library of Congress Cataloging-in-Publication Data
Krimpmann, Andreas, 1963-
Principles of group accounting under IFRS / by Andreas Krimpmann.
pages cm
Includes bibliographical references and index.
ISBN 978-1-118-75141-1 (pbk.)
1. Accounting--Standards. 2. Financial statements, Consolidated. I. Title.
HF5626.K75 2015
657--dc23
2014046087
Cover Design & Image: Wiley
Set in 11/12.3pt, Times New Roman MT Std by Laserwords Private Ltd, Chennai, India
Printed in Great Britain by TJ International Ltd, Padstow, Cornwall, UK
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To my family
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Contents
List of figures xvii
List of tables xxiii
Preface xxvii
Introduction to the book xxix
A The case study 1
1. About the group 2
2. Allocation of examples 4
B Legal requirements for consolidated financial statements 9
1. IFRS standards 10
1.1. Transition to the new consolidation suite (IFRS 10 to
IFRS 12, IAS 27 and IAS 28) from IAS 27 rev. 2008 13
1.2. Dependencies between IFRS 3 and IFRS 10 22
1.3. Accounting transition of joint ventures 23
2. Exemptions 35
3. Local accounting standards 38
4. Taxation 39
5. Definitions 41
C Definition of Groups 43
1. The control concept 44
2. Joint control 55
3. Loss of control 61
4. Group compositions 65
5. Special cases 68
5.1. Structured entities 68
5.2. Limited partnerships 70
5.3. Deemed separate entities 71
D Preparation of Consolidated Financial Statements and Annual Reports 73
1. Lifecycle of subsidiaries 74
2. Structures 78
2.1. Accounting in group structures 78
2.2. Shared services 80
vii
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viii Contents
2.3. Accounting structures 83
2.4. Reporting structures 92
3. The preparation process 98
3.1. Communication 102
3.2. Subsidiaries 103
3.3. Reporting 106
3.4. The parent 107
3.5. The group 107
4. Organization 110
E Initial consolidation 113
1. Basics 114
1.1. Valuation levels 116
1.2. The opening balance sheet 119
2. Mergers and acquisitions 128
2.1. The acquirer’s view 130
2.2. The group’s view 132
3. Purchase price allocation 136
3.1. The acquirer 138
3.2. The acquisition date 140
3.3. Consideration transferred (purchase price) 143
3.4. Acquired assets – recognition and measurement 152
3.4.1. General requirements on recognition and measurement 152
3.4.2 Existing assets and liabilities 158
3.4.3. Non-accounted assets and liabilities 161
3.5. Goodwill and non-controlling interests 182
3.6. Business vs. assets and liabilities 190
4 Other aspects of purchase price allocations 193
4.1 Cash flow statements 193
4.2 Disclosures 194
5. Consolidation techniques 197
5.1. The parent’s view 198
5.2. The group’s view 202
5.2.1. Step one – preparation for consolidation 203
