Group Accounts under UK GAAP

Description

This title provides accountants and auditors with easy to follow and well structured guidance on the preparation of group accounts in line with UK GAAP. Group accounts must be prepared, by law, for medium-sized and large groups. Listed companies are required to prepare their accounts in line with International Financial Reporting Standards but larger unlisted companies can prepare their statements using UK GAAP. Groups are very common in the UK and are likely to become even more common when corporation tax rates increase in the future as there are various tax advantages to operating under a group structure. Group structures can vary (e.g. horizontal, vertical, hybrid, D-shaped|) and preparing financial accurate financial statements can be complex as a result. While there is a lot of guidance on producing accounts under IFRS, there is every little in evidence dealing with the UK GAAP rules. This title addresses this gap. The commentary identifies the differences between IFRS and UK GAAP in the treatment of group accounts. The differences between accounts produced pre and post Brexit are also covered. All commentary is supported throughout by the inclusion of worked practical examples based on the authors experience dealing with clients and running training courses. Preface Contents Table of Statutes Table of Statutory Instruments and Other Guidance Table of Examples Chapter 1. Introduction Introduction Interaction with other accounting standards Purpose of consolidated financial statements Company law requirements Exemptions in company law Exemptions available under FRS 102 Ineligible groups Chapter 2. Overview of Consolidated Financial Statements and UK GAAP Introduction FRS 100 FRS 101 FRS 102 FRS 103 FRS 104 FRS 105 Small groups FRS 102, Section 9 Consolidated and Separate Financial Statements FRS 102, Section 19 Business Combinations and Goodwill Chapter 3. Group Accounts: Introduction Introduction Definition and introduction to control Loss of control Acquisition of control Group structures Intra-group transactions and balances Chapter 4. Fair Values and Deferred Tax in a Group Introduction Fair value of net assets acquired Deferred tax and unremitted earnings Chapter 5. The Consolidation Process Introduction Purchase method of accounting Disclosure requirements Chapter 6. Investments in Associates Introduction Scope of FRS 102 and FRS 105 Group issues Definition of an associate and significant influence Measurement – accounting policy election Fair value models Disclosure requirements Chapter 7. Investments in Joint Ventures Introduction Defined terms Types of joint venture under UK GAAP Transactions between a venturer and a joint venture Group issues Investors that do not have joint control Disclosures Chapter 8. Acquisitions and Disposals of Interests Introduction Investment to associate Associate to investment Joint venture to associate Subsidiary to subsidiary Subsidiary to financial investment Subsidiary to associate or joint venture Partial disposal where control is retained Deemed disposals Chapter 9. Consolidated Cash Flow Statement Introduction Company law requirements Overview of preparing the consolidated cash flow statement Cash flows attributable to NCI Cash received from and paid to associates Subsidiaries Foreign exchange gains and losses Worked example incorporating the above technical issues Thematic review of the cash flow statement Chapter 10. Foreign Currency Issues Introduction Functional currency Reporting foreign currency transactions in the functional currency Presentation currency Intra-group balances and transactions Goodwill on acquisition of a foreign operation Chapter 11. Group Reconstructions Introduction Merger accounting Merger relief Disclosures Chapter 12. Auditing Groups Introduction Objectives of the group auditor Acceptance Planning the group audit Reliance on the work of component auditors Auditing investments in subsidiaries Auditing the consolidation Obtaining sufficient audit evidence Communication with group management Communication with those charged with governance of the group Overseas subsidiaries Support letters Transnational audits Documentation Index