Page 12 - PowerPoint Presentation

CONSOLIDATIONS AFTER THE DATE OF ACQUISITION

Transaction costs at acquisition of investment

in subsidiary

• The problem that needs to be dealt with on

consolidation is the transaction costs that were

capitalised in the separate statements in line with IFRS

9 requirements through OCI.

• However these need to be expensed in the

consolidated financial statements in order to comply

with IFRS 3.

• This is done by reversing the costs that were capitalised

and expensing them on a pro forma basis.

• Where an investment in a subsidiary is measured at fair value

through profit or loss there is no problem, as both transaction

costs on the acquisition of the investment, as well as
acquisition-related costs on the business combination are

expensed.
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