Subsidiaries acquired exclusively with a view to resale - a new approach
Item
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Title
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Subsidiaries acquired exclusively with a view to resale - a new approach
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Description
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The previous version of AC 132, Consolidated Financial Statements and Accounting for Investments in Subsidiaries, contained an exemption from the consolidation of a subsidiary where control is intended to be temporary because the subsidiary is acquired and held exclusively with a view to its subsequent disposal in the near future. With the release of IFRS 5 (AC 142), Noncurrent Assets Held for Sale and Discontinued Operations, this exemption from consolidation has been eliminated; and the revised IAS 27 (AC 132), Consolidated and Separate Financial Statements, now requires all subsidiaries to be consolidated. The disclosure and individual fair value accounting exemptions provided in IFRS 5 (AC 142) for subsidiaries acquired exclusively with a view to resale should save costs and effort in the consolidation of these subsidiaries. Care should, however, be taken to ensure that compliance is achieved with the IFRS 5 (AC 142) criteria for classifying a disposal group as 'held for sale' on the date of acquisition. Failure to comply with these criteria upon the acquisition of a subsidiary acquired exclusively with a view to resale may well result in unfavorable implications for the group.
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Creator
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Tomes, Tania
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Venter, Elmar Retief
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Subject
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Subsidiaries
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Consolidated financial statements
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Acquisitions and mergers
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International Financial Reporting Standards
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IFRS 5
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IFRS 3
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International accounting standards
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International Accounting Standards Committee Statements
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IAS 27
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Subsidiary corporations
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Accounting -- Standards
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Publisher
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South African Institute of Chartered Accountants
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Date
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2008-05-19T11:40:57Z
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2008-05-19T11:40:57Z
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2005-11
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Type
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Article
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Format
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1576560 bytes
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application/pdf
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application/pdf
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Identifier
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Tomes, T & Venter, E 2005, 'Subsidiaries acquired exclusively with a view to resale - a new approach', Accountancy SA, pp. 18-26. [http://www.accountancysa.org.za/]
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0258-7254
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http://hdl.handle.net/2263/5354
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Language
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en
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Rights
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South African Institute of Chartered Accountants