Page 11 - PowerPoint Presentation

INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

Initial Recognition Of Associate (.10 & .32)

• Like with sub, identify fair value of identifiable net assets at

date investment becomes an associate

• i.e. date significant influence is acquired

• Treatment of goodwill

• Goodwill on a separate line item only when control is obtained 
IFRS 3

• i.e. goodwill only separately recognised for a sub
• Implied “goodwill” included in “Investment in Associate”

• Gain on bargain purchase

• i.e. Share of FV of identifiable net assets > consideration paid

• Excess is recognised in P/L immediately (.32(b))

• FV adjustments at initial recognition

• Result in adjustments to group earnings

• Example: PPE undervalued at acquisition

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