IFRS 10 - Intercompany transactions
Posted: 14 Jan 2022, 11:22
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
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