Septiembre 2011

Business combinations

The fair value of any contingent consideration in the cost of a business combination must be recognised as an asset, as a liability or as equity, as appropriate, unless this gives rise to the recognition of a contingent asset resulting in a credit to income (i.e. gives rise to a gain on a bargain purchase in the business combination).
The identifiable assets acquired and liabilities assumed in a business combination are generally recognised at fair value (or on the basis of the specific measurement bases provided for in the standard), except for intangible assets for which there is no active market
the recognition of which at fair value could give rise to a credit to income (i.e. gives rise to a gain on a bargain purchase in the business combination).
This limitation does not exist under IFRSs.
This limitation does not exist under IFRSs.

Consolidation

The rules for the preparation of consolidated financial statements (NOFCAC) introduce an exception to the obligation to present consolidated financial statements when a parent has interests
exclusively in subsidiaries that do not represent a significant interest taken individually or as a whole.
The equity of non-controlling interests is calculated on the basis of their percentage of ownership of the fair value of the assets and liabilities of the subsidiary (i.e. goodwill on consolidation is not attributed to non-controlling interests).
Loss of classification as investment in associate or interest in jointly controlled entity and classification as available-for-sale financial asset:
In this case, under the SNCA the cost of the financial asset is considered
to be the consolidated carrying amount on the date of exclusion from consolidation. This means that a valuation adjustment (in equity) arises on the recognition of this investment at fair value.
Consolidated financial statements must include the parent and all its subsidiaries.
IFRSs also provide for the option of measuring them at their fair value on initial recognition.


Under IFRSs the loss of significant influence or joint control are significant economic events treated as a loss of control, i.e. the initial cost of the new financial asset is its fair value and any associated valuation adjustments are derecognised.

Changes in ownership interest that do not result in a loss of control:
In transactions that do not result in a loss of control (accounted for in equity without affecting goodwill or profit or loss) in which non-controlling interests are involved, the equity of the
non-controlling interests is calculated as their percentage of ownership
of the fair value of the assets and liabilities of the subsidiary plus their share of the goodwill associated with the change that has taken place.
Recycling of translation differences to profit or loss:
Under the SNCA the payment of a dividend leads to the transfer to profit or loss of the translation differences associated with the amount paid.
IFRSs do not indicate that goodwill on consolidation should be attributed to non-controlling interests in transactions of this nature.


Under IFRSs a dividend is not considered to constitute a disposal for the purpose of recycling translation differences to profit or loss.