Hi all, I would like to ask your professional advices on this issue:
- A has a 49% share in a joint venture, X.
- X has 2 100%-owned subsidiaries, Y and Z.
In X's perspective, I understand that X needs to consolidate its subsidiaries, Y and Z.
In A's perspective, A will account for X using equity method when preparing its consolidated FS.
Questions:
What about A's indirect holding in Y and Z? Since A indirectly owns 49% of Y and Z, should A treat Y and Z as joint ventures or associates when preparing its consolidated FS?
Joint Venture - Indirect Holding
Re: Joint Venture - Indirect Holding
Hi, for sure the equity accounting in A's consolidated financial statements should be based on consolidated data of X, as discussed here:
https://ifrscommunity.com/knowledge-bas ... s-a-parent
and I would say that Y a Z are A's joint ventures as well. If A has joint control over X, and X controls Y and Z, then by definition A has joint control over Y and Z.
https://ifrscommunity.com/knowledge-bas ... s-a-parent
and I would say that Y a Z are A's joint ventures as well. If A has joint control over X, and X controls Y and Z, then by definition A has joint control over Y and Z.
Re: Joint Venture - Indirect Holding
Thanks Marek.
So in A's Consolidated Balance Sheet, it will have Investment in Joint Ventures (X,Y and Z) and share 49% of post-acquisition change in their (X,Y and Z) net assets, right?
So in A's Consolidated Balance Sheet, it will have Investment in Joint Ventures (X,Y and Z) and share 49% of post-acquisition change in their (X,Y and Z) net assets, right?
Re: Joint Venture - Indirect Holding
I would still say that the investment shown in the balance sheet is in X only, and the share in X's P&L is based on its consolidated data, i.e. including Y and Z
Re: Joint Venture - Indirect Holding
As far as I understand, basically the carrying amount of investment in Joint Venture = investment cost in X + A's share of post-acquisition profit/OCI of X group?
Re: Joint Venture - Indirect Holding
yes, less:
- dividends and other capital distributions of X
- imapirment
- dividends and other capital distributions of X
- imapirment
Re: Joint Venture - Indirect Holding
Thanks Marek! I think I have more confidence to deal with this JV now
Re: Joint Venture - Indirect Holding
great! Post back if you come across any interesting issues
Re: Joint Venture - Indirect Holding
From memory this company has something similar, See note 9 of accs. JV with further subs (also with NCI etc)...
https://find-and-update.company-informa ... ng-history
https://find-and-update.company-informa ... ng-history
Re: Joint Venture - Indirect Holding
Thanks! It helps my FS disclosureJRSB wrote: ↑04 May 2021, 20:00 From memory this company has something similar, See note 9 of accs. JV with further subs (also with NCI etc)...
https://find-and-update.company-informa ... ng-history