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In this newsletter, we look at the following topic:
Amendments to IFRS 1 and IAS 27
The amendments to IFRS 1 and IAS 27 are expected to simplify the preparation of separate financial statements on first-time adoption and eliminate potential dividend traps. The equivalent amendments are expected to be published by the Hong Kong Institute of Certified Public Accountants (HKICPA) in due course.
The amendments bring three major changes:
- The cost of a subsidiary, jointly controlled entity or associate on transition to IFRS is determined under IAS 27 or as a deemed cost;
- Dividends from a subsidiary, jointly controlled entity or associate are recognised as income. There is no longer a distinction between pre-acquisition and post-acquisition dividends; and
- The cost of the investment of a new parent in a group is measured at the carrying amount of its share of equity as shown in separate financial statements of the previous parent.
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Read more by downloading our HKFRS News - Jul 2008 (pdf file, 71KB) for your reference.
Note: HKFRS has converged with IFRS effective from 1 January 2005. Contents contained in this newsletter are relevant to both HKFRS preparers and IFRS preparers.
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