Intra-group transactions in separate financial statements

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Marek Muc
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Intra-group transactions in separate financial statements

Post by Marek Muc »

Hi All, we've seen many questions on these forums relating to intra-group transactions not carried out at fair value or even without any consideration. I've summarised my suggested approach to these transactions:

https://ifrscommunity.com/knowledge-bas ... tatements/
Leo
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Re: Intra-group transactions in separate financial statements

Post by Leo »

Very good article ! Thanks
DJP
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Re: Intra-group transactions in separate financial statements

Post by DJP »

Good article, Marek.

Perhaps as a suggestion on the financial guarantee part, you could add that the parent could also choose to take the debit straight to P&L instead of increasing the investment.I believe there is an accounting policy choice here too.

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Marek Muc
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Re: Intra-group transactions in separate financial statements

Post by Marek Muc »

Thanks DJP, that's a good point, I will add it.
JRSB
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Re: Intra-group transactions in separate financial statements

Post by JRSB »

It’s worth noting that such a guarantee should be eliminated from consolidated financial statements if the underlying borrowing is already shown in the consolidated statement of financial position.

out of interest, why do you say 'if' here, if the parent has issue a guarantee then presumably it's debt to an external party? Or maybe 'since' is better. Actually, it's feasible that a parent could guarantee a loan between one subsidiary and another, so it's ok...
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Marek Muc
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Re: Intra-group transactions in separate financial statements

Post by Marek Muc »

I was thinking about guarantees relating to undrawn facilities, but now I'm wondering if these should be eliminated anyway...
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