Financial Skills: Group Accounting

Course Overview

Group accounting has for many years been an important part of the financial reporting agenda. Perhaps the most contentious area -'the goodwill debate', which raged for years, was finally resolved with the introduction of FRS 10. However, change is now upon us again with the advent of international harmonisation and the publication of IFRS 3 -Business Combinations. This course explores the key principles of group accounting and the proposed changes by

• Examining in detail the current UK group accounting standards
• Reviewing the proposed changes that IFRS 3 will bring

Examples from published accounts and financial press debates will be used to illustratekey issues.

Course Outline

INTRODUCTION TO GROUP ACCOUNTING

• Fundamentals -control, participating interests and significant influence

ACCOUNTING FOR SUBSIDIARIES

• Acquisition accounting (FRS 2) -one entity, substance over form
• Dealing with minority interests -give them their share
• Consolidation adjustments -treatment of inter-company transactions, PUPs, fair values and dividends
• Consolidated cash flows -follow the money

ACCOUNTING FOR ASSOCIATES AND JOINT VENTURES

• Equity accounting (FRS 9) -bring in your share
• Additional disclosures for JVs
• A move towards proportional consolidation?

ACCOUNTING FOR GOODWILL

• Calculating goodwill (FRS 7) -how to get to fair value for consideration and net assets
• Treatment of goodwill in the financial statements (FRS 10 and IFRS 3) -what's happened to amortisation?

FOREIGN EXCHANGE IN GROUPS

• Independent and dependent entities (SSAP 20, FRED 24) -which rates to use and where to take gains/losses

CURRENT DEVELOPMENTS IN GROUP ACCOUNTING

• The impact of international harmonisation (IFRS 3) -no more mergers, no amortisation and a move to proportional consolidation
• Emerging issues and controversies