H All
Consider the Company structure below:
Company A (Parent & investment entity) holds 100% in Company B (considered as a company servicing the group with investment related services) and 100% in Company C.
During the year, Company B has given a loan of $100,000 to Company C which is still outstanding at year end.
As per IFRS 10, given that the parent (Company A) is an an investment entity, it is exempt from consolidating Company C and show only "Inv in sub at FV" in its balance sheet.
And given that Company B is a service company, it should be consolidated in Company A.
My question is how do we treat the loan receivable and loan payable of $100,000 which is an intercompany loan between related companies. Is it eliminated and how?
Thanks
Lindsay
IFRS 10 - Intercompany transactions
Re: IFRS 10 - Intercompany transactions
Great question.
My question would be - when you determine FV of B, do you include the fact that it has a 100k receivable on its' balance sheet?
My question would be - when you determine FV of B, do you include the fact that it has a 100k receivable on its' balance sheet?
Re: IFRS 10 - Intercompany transactions
Yes, on the balance sheet of B, there is the loan receivable.
Re: IFRS 10 - Intercompany transactions
elimination of intercompany balances is a consolidation procedure so I would not eliminate it at all in this case
Re: IFRS 10 - Intercompany transactions
This is what I was thinking too. Unless JRSB has a different view.
Thank you.
Thank you.
Re: IFRS 10 - Intercompany transactions
No I don't - I was just interested as I haven't seen the case. So Marek the liability to B would feature in consol balance sheet?
Re: IFRS 10 - Intercompany transactions
yes, except that it's B's receivable from C if I got it right
Re: IFRS 10 - Intercompany transactions
Thank you guys for your inputs.