IFRS: Consolidated Financial Statements I

Syllabus

1. Nature, significance, and purpose of consolidated financial statements. Theoretical approaches to the interpretation of consolidated financial statements. Historical development of consolidated financial statements. 2. Definition of multinational and national legal regulations for the area of consolidated financial statements. EU Accounting Directive focusing on consolidated financial statements. IFRS adopted by the European Union for the area of consolidated financial statements. Relationship between EU Directives and IFRS. Impact of multinational regulation on national legal regulation of consolidated financial statements in the conditions of the Slovak Republic as an EU member state. Obligation to prepare consolidated financial statements according to Act No. 431/2002 Coll. on Accounting, as amended (hereinafter referred to as the "Accounting Act"). Exemptions from the obligation to prepare consolidated financial statements under the Accounting Act. Other obligations regarding the parent entity. 3. Obligation to prepare consolidated financial statements according to IFRS (IFRS 10 Consolidated Financial Statements). Control model under IFRS 10 in comparison with Slovak legal regulation. Exceptions from the application of IFRS 10. Preparation of individual (separate) financial statements according to IAS 27. 4. Process of preparation and compilation of consolidated financial statements (pre-consolidation adjustments, consolidation adjustments, preparation of consolidated statements). Internal regulation for consolidation within a group of entities. Consolidation procedures for subsidiaries under IFRS 10. Structure and content of consolidated financial statements according to IFRS. Peculiarities of the consolidated financial statements of a parent entity compared to its individual financial statements. 5. Definition of a business combination and methods of forming business combinations according to IFRS 3 Business Combinations. Transactions excluded from the scope of IFRS 3. Connection between business combinations and consolidated financial statements. Nature of the acquisition method of accounting for business combinations according to IFRS 3 and its application in consolidated financial statements. 6. Identification of the acquirer according to IFRS 3. Determination and measurement of the consideration transferred by the acquirer at the date of acquisition according to IFRS 3. Determination of the acquisition date according to IFRS 3. Recognition of acquired assets and assumed liabilities of the acquired business at the date of acquisition according to IFRS 3. Identification and measurement of non-controlling interests according to IFRS 3 at the date of acquisition. Treatment of a previously held interest in the acquired business at the date of acquisition. 7. Recognition and measurement of goodwill or a gain from a bargain purchase according to IFRS 3. Recognition of individual components of a business combination (consideration transferred, acquired assets and assumed liabilities, goodwill, non-controlling interests) after the acquisition date. Measurement period according to IFRS 3. Disclosure of information about a business combination according to IFRS 3. 8. Impairment testing of goodwill according to IAS 36 Impairment of Assets. Identification of a cash-generating unit, determination of the carrying amount and recoverable amount of a cash-generating unit, allocation of goodwill to a cash-generating unit or groups of such units, determination and recognition of an impairment loss on goodwill. 9. Recording and recognition of the effects of fair value adjustments, including their impact on the amount of reported goodwill (or recorded gain from a bargain purchase), for non-depreciable and depreciable non-current assets, inventories, financial liabilities, assets (identifiable intangible assets created internally) that are not included in the subsidiary's balance sheet, and contingent liabilities of the subsidiary at the date of acquisition that meet the IFRS 3 criteria for recognition (contingent assets must not be recognized). Identification, measurement, and recognition of deferred income tax according to IAS 12 related to adjustments at the date of acquisition and after the date of acquisition. 10. Compilation of a consolidated balance sheet for a group (parent entity – subsidiary) with the emergence of goodwill or a gain from a bargain purchase. Treatment of retained earnings and other components of the subsidiary's equity at the date of acquisition and after the date of acquisition for two consecutive accounting periods. 11. Identification, measurement, and recognition of non-controlling interests at the date of acquisition (proportionate or at fair value) and subsequent recognition of non-controlling interests after the date of acquisition depending on the chosen method of their measurement at the date of acquisition (identification of changes in non-controlling interests after the date of acquisition) in the consolidated balance sheet. 12. Compilation of a consolidated statement of profit or loss and other comprehensive income for a group (parent entity – subsidiary) with a non-controlling interest upon acquisition during the accounting period for two consecutive accounting periods. Recognition of the non-controlling interest in the profit or loss and other comprehensive income. Analysis of the group's comprehensive income. 13. Recognition of an impairment loss on goodwill. Impact of the measurement of non-controlling interests on the recognition of an impairment loss. Impact of an impairment loss on the consolidated balance sheet and the consolidated statement of profit or loss and other comprehensive income. Interim written assignment.