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many thanks Marek, do you have a more material one, with the whole PYA balance restated?

Hi,

I'm looking for some example of companies that have undertaken a PYA in their annual report. If you can think of any name, please share with me, thanks!

yes agreed, thanks!

If my description was unclear, I said, for D to keep its mino interests of 49% in B, but only sell C to A. I reckon that it's a legal question, but view is D cannot do so directly. It will need B to sell it's shares to A first.

I realized that this can only work by A buying the 70% of C from B. And then, D can get the benefit of a increased net assets in B. B can either distribute dividends to D or D can sell its shares in B. But it's not possible for D to only sell the 35% in C.

(1) If entity A pay cash to entity B to buy the 70% shares in C, and instruct B to do a dividend distribution, the result would be the same than (2) entity A directly paying B for the 35% worth. However, if route (2) is chosen, what would be the accounting in entity B as it will not receive consider...

Entity A has 65% interest over C and entity D has 35% interest over C. However, if entity A want to buy the 35% interests from D, to whom entity A should transfer the money? Should it buy the 70% shares in C from B and transfer the money to entity B which will transfer the money in relation to the 4...

if you have identified there are some intangibles, this will affect the goodwill.
similarly, if there are intangibles, NCI might have another fair value which may counterbalance the goodwill.

the above is a V0.

Parent A: Cash; 1100 Equity: 1100 Target: Net assets: 1000 Equity: 1000 Parent A subscribe for 1100 of the shares issued by the Target, existing shareholder will not participate and will lose majority. Parent A will hold 1100/2100=52.38% after issue. After issue: Target: Net assets: 2100 Equity: 210...

Whether you include it or not, it should not change your assessment of the goodwill. A PPA exercise should be performed.

Sometimes, the entity needs cash to grow and the existing shareholding can't put more cash into it, so it looks for external investors.

In this situation, you wouldn't get a goodwill, but depending on the percentage you acquire, you might end up with a bargain purchase.

Just moving it up in case.

Just putting this up the chain.

Based on IFRS 10 B91, IFRS 9 does not apply to interests in subsidiaries that are consolidated. When instruments containing potential voting rights in substance currently give access to the returns associated with an ownership interest in a subsidiary, the instruments are not subject to the requirem...

I think it all depends on what are you able to do as an investor, because sometimes, you just don't have the info, and it's too hard to do the adjustments (including for the prior years). I think you would need to agree with the auditors depending on the materiality of the investment. For example, y...

A strict application of a compound financial instrument would lead me to the journals on the right. However, I'm trying to find a economic rational.

In this case, the principal amount should be treated as equity and the PIK amount as liability. For example, a convertible prefs with principal amount of 1 million, paying a PIK cumulative interests of 10% every year. Principal convertible into fixed amount of shares and PIK amount into a variable a...

I think generally, CA of your jurisdiction tells you who needs to prepare group accounts and IFRS 10 what they contain. On that basis, if a company is exempt of conso by CA, then no further questions, this company do not need to do conso, and can apply ias 27 to its full extent. if a company is not ...

Make sense, same in France, the CA only gives guidance on exemptions in terms of group size.

The issue is under CA06, there is the section that prescribes exemption for companies to do conso accounts. In such a case, they can prepare individual/statutory accounts. I cannot find anything on accounting if it's an investment entity. In parallel, there is this IFRS 10 para 27-33 which prescribe...

I've seen companies doing a "hybrid" P&L, with items by function, but putting an intermediary sub-total "EBITDA" and depreciation & amortisation coming after that. This has been rejected by the auditors. In this situation, you can show "EBITDA" only if you prepa...

I don't think the hybrid approach is possible, either a P&L by nature or by function.

Looks fine. If it's only 2% provided it's sub already and it's ias27 accounting,

Still you need if there is any value at a given time.

I haven't found anything regarding this under CA06 JRSB, could you please have a look as you are the expert in the UK. Thanks

I may have, thanks. So based on CA 06, a company exempt from producing conso can prepare separate accounts, if it's under UK adopted IFRS, then the company can prepare accounts under IAS 27. In such a case, it can apply the cost method to account for the subs. However, if the entity is an investment...

Thanks again for your reply Marek!

Not particularly, the reason I'm asking this is I haven't found in the CA 2006 something obliging an entity exempt from consolidation (an investment entity for example) to hold investment at fair value. That's why I was wondering if someone has got any clue that I may have overlooked.

No where, that's my question.

Have you ever come across preference shares issued, with a equity host and a liability component? For example, the principle amount can only be redeem by a fixed number of ordinary shares, however, the instrument carries PIK interests compounded annually, which will be converted into a variable numb...