2014-09-24-KPMG_China-年度财务报表指引_IFRS_12的补充_22页_682kb

IFRS 12 Summary: Disclosure of Interests in Other Entities

Core Content

This document is a supplement to the Guide to annual financial statements – Illustrative disclosures (September 2014 guide) and provides additional disclosure examples and explanations related to IFRS 12 Disclosure of Interests in Other Entities, which became effective for annual periods beginning on or after 1 January 2013. It focuses on the disclosure requirements for subsidiaries, associates, joint ventures, joint operations, and unconsolidated structured entities.

Main Objectives of IFRS 12

• To provide disclosure that helps users of financial statements to evaluate:
  • The nature and risks associated with an entity’s interests in other entities.
  • The effects of these interests on the entity’s financial position, performance, and cash flows.

Key Disclosure Requirements

• Material associates, joint ventures, and joint operations must be disclosed separately, with a focus on significant judgements and assumptions made in determining the nature of the interest.
• Structured entities are entities designed such that voting or similar rights are not the dominant factor in determining control. These are governed by contractual arrangements rather than voting rights.
• Unconsolidated structured entities must also be disclosed, including the nature and changes in the risks associated with the entity.
• Non-controlling interests (NCI) must be disclosed, including their ownership percentage and the impact on the group’s financial statements.

Disclosure of Interests in Other Entities

• Materiality is a key criterion for disclosure, with material associates and joint ventures needing detailed financial information.
• Summarised financial information for material associates and joint ventures must be reconciled to the carrying amount in the statement of financial position.
• The reconciliation includes fair value adjustments, accounting policy differences, and elimination of unrealised gains or losses.
• Goodwill is not embedded in the summarised financial information but is included in the reconciliation to the carrying amount.

Examples of Entities and Disclosures

Material Associates

• The Group has two material associates, Gold and Silver, both of which are equity-accounted.
• Gold: 40% ownership, based in Singapore.
• Silver: 30% ownership, based in Germany.
• Financial information is presented in thousands of euros, including revenue, profit, net assets, and changes in the Group's interest.

Material Joint Ventures

• Mercury is a 50% unlisted joint arrangement with XYZ, based in Denmark, and is classified as a joint venture.
• The Group has a residual interest in Mercury’s net assets.
• Financial information includes revenue, profit, and net assets, with additional disclosures on contributions and unrealised profits.

Material Joint Operations

• Palladium is a 50% joint arrangement with ABC, based in the UK, and is classified as a joint operation.
• Unlike joint ventures, limited quantitative disclosures are required for joint operations, focusing on significant judgements and assumptions in classification.

Subsidiaries and NCI

• The Group has 20 subsidiaries, 18 of which are controlled through majority voting rights.
• Cerium is a subsidiary with less than 50% voting rights, but the Group controls it due to dispersed voting rights and historical control.
• Iridium is a subsidiary with nominal share capital, funded through bank loans and under the Group’s direction.
• The Group has guaranteed a loan to Iridium, which is considered a financial support arrangement.

Non-controlling Interests (NCI)

• NCI has a material interest in two subsidiaries.
• The proportion of ownership interests held by NCI must be disclosed.
• The group composition is disclosed in narrative form, highlighting the structure and relationships within the group.

Aggregation of Disclosures

• Disclosures can be aggregated for similar entities based on nature, industry, or geography.
• However, minimum disclosure must be provided separately for subsidiaries, associates, joint ventures, and joint operations.

Structured Entities

• A structured entity is governed by contractual arrangements, not by voting rights.
• Examples include securitisation vehicles, asset-backed financings, and investment funds.
• The disclosure requirements for structured entities are based on the purpose and design of the entity and the practical ability to direct activities.

Summary of Disclosures

• Material associates and joint ventures must be disclosed with summarised financial information.
• Non-controlling interests are disclosed separately, including the proportion of ownership and impact on financial statements.
• Structured entities require specific disclosures based on their governance and contractual arrangements.
• Aggregation is permitted for similar entities, but minimum disclosures are required for each category.

Conclusion

This supplement illustrates the disclosure requirements of IFRS 12 and provides examples of how entities should present information on their interests in other entities. It emphasizes the importance of materiality, control assessment, and governance structure in determining the appropriate level of disclosure. The disclosures should be tailored to reflect the specific circumstances of the reporting entity.