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Can the context of "consignment arrangements" be applied to the selling of services (such as the right to use a physical space). Or does this term typically refer to physical goods that are transferred?

Hi all Company X maintains a distinct "Client Money" account designed to hold client funds. This account is subject to specific contractual agreements where it can be argued that these funds are not assets of X. (For those arguments we used the following which was referenced in another thr...

Sorry to reopen an old thread. I understand from the above that upon the merger, the Parent would recognize the carrying amounts of the merged subsidiaries net assets at a consolidated level as at the date of the merger. Is there a view on how we would treat the difference between: - The carrying am...

B will acquire D with a 'normal' SPA for consideration equal to the fair value of D's net assets.

Does this scenario fall under the scope of BCuCC? This is a combination in which B, C and D are still ultimately controlled by the same party (A), both before and after
the combination.

Thank you JRSB.

With regards to B's stand alone accounts - would the impact be that it would recognize an extra subsidiary at cost (assuming this is their policy). Or is there a additional impact that I have missed?

Hello all - I'm reaching out to gain some insights into a specific transaction scenario that I'm trying to understand if it would be considered a 'business combination under common control'. Attached is an outline of the proposed transaction. B is intending to acquire 100% of Entity D from Entity C....

But is that consistent with the knowledge base? "Impairment losses recognised by an associate or joint venture may not always be incorporated into the investor’s financial statements in the same amount. This discrepancy is primarily due to fair value adjustments and goodwill recognised by the i...

Hi again. I will rephrase the question slightly. Hope this clarifies. Company P acquires 50% of Company A for 600. It is accounted as an associate in accordance with IAS 28. A has three assets with a book value of 950. The fair value of these three assets is 1200. There has been no depreciation, imp...

Another clarification: it was A who tested their assets for impairment individually. P received the results of these tests and has adjusted them in accordance with my interpretation of IAS 28.38.

Hi Marek. I am referring to P taking its share of A's results. These results include impairment losses recognized by A (or in this case, the lack of impairment losses). These results need to be adjusted because P measured its interest in S's asset at fair value at the date of acquisition. Therefore,...

But P is required to take to take its share of A's results. A's results are 0 (because A incurred no impairment). But these results need to be adjusted because of the fair value adjustments recognized by P (IAS 28.38). These 'adjusted' results could be -80 (-40 when taking P's 50% share). To clarify...

Hi all. Please consider the following scenario: Company P acquires 50% of Company A for 400. It is accounted as an associate in accordance with IAS 28. A has one single asset with a book value of 100 . The fair value of this asset is 800 . There has been no depreciation, impairments or any other res...

Hi all - I am struggling to understand when and how an investor is supposed to make appropriate adjustments to their share of an associate’s result for the period (IAS 28.32). I try to demonstrate using the following example: We have a 25% stake in associate X which we paid 250 for. We apply IAS 28....

Thanks - so how does this statement interact with the treatment initially proposed (whereby, if we don't already have any influence, we'd treat the asset in accordance with IFRS 9). Does this mean we should only focus on the economic characteristics when we already hold significant influence? Hope t...

Thank you Marek - really helpful. I should probably stop going down the rabbit hole, but now I'm quite keen on exploring what happens if the holder already has significant influence. Appreciate that this is complex, but are you aware of any guidance or papers describing investments "in substanc...

In the fact pattern described above, we wouldn't be able to exert significant influence until after the conversion (if it occurs). So I read that as the holder would have to initially account for the asset in accordance with IFRS 9 (but then a change of treatment when/if it is converted in to the 25...

Thanks Ketan - so that means the initial recognition should still be treated in accordance with IFRS 9? The fact that we will be hoping to convert this in to 25% equity of the issuer (and would thereafter be subject to IAS 28) doesn't change this?

Hi all. Hope you can offer some guidance on how to account for the following scenario from the perspective of the holder: The key details of the scenario are as follows: We are the holder of a convertible "bond". The interest rate on the bond is below-market. The bond is mandatorily conver...

Hi all. How would the treatment proposed above differ if instead of receiving 5% of equity, we receive 25% equity (meaning, if the conversion happens, it would be an associate under IAS 28). Would we still initially recognize the asset as a financial asset measured at FVTPL? If so, what would the su...