shares out of 40,000 shares in issue for Happy Ltd. NOTE THE SHARE PRICE. This acquisition gives the group 80% control. The above extract shows how a parent company has gained control over a subsidiary and a significant influence over an associate.
For discussions on control, refer to Part One of the series. Instep number 1, it is important to identify two important date i. Date of acquisition. This is defined in IFRS3 (revised,
Business combinations, as the day that the parent achieves control, where the parent of the group is the ultimate parent. It is the date from which a subsidiary is consolidated – i.e., when the subsidiary’s
net assets, goodwill and NCIs are recognised.
From the above extract, the date of acquisition of the subsidiary is January 1, 2012. Yet, Victory obtained significant influence over Comfort Ltd in 2005. ii. Date of the statement of financial position. This is the date on which the consolidated financial statements are being prepared. From the above extract, the date of the statement of financial position is December 31, 2012. JAY
That is very insightful. My next question is how are intra-group transactions and balances accounted for? KO
I will use Step 2 to answer your question. Share with your friends: 
