Need to Know: IFRS 10 - Consolidated Financial ... - BDO Canada

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52 IFRS 10 Consolidated Financial Statements8.4. ReassessmentAn investment entity is required to reassess its investment entity status if facts and circumstances indicate that itsstatus has changed. The change of the status of an investment entity is accounted for prospectively from the datethe change in status occurs.When an entity loses its investment entity status it applies IFRS 3 to subsidiaries previously measured at fair valuethrough profit or loss. The date of the change of status is the deemed acquisition date and the fair value of thesubsidiary at that date is the deemed consideration. This recognises the change in status in the same way as abusiness combination achieved in stages in IFRS 3. The difference between the deemed consideration, the amountof any non-controlling interest and the acquisition date amounts of the identifiable assets acquired and liabilitiesassumed (measured in accordance with IFRS 3) is recognised as goodwill or a bargain purchase.When an entity becomes an investment entity, it ceases to consolidate its subsidiaries at the date of the changeof status except for any subsidiary that it is required to continue to consolidate as noted above (e.g. subsidiariesthat provide services that relate only to the investment entity’s own investment activities). The investment entityaccounts for the change in status as a deemed disposal or loss of control under IFRS 10 with any resulting gain or lossbeing recognised in profit or loss.
IFRS 10 Consolidated Financial Statements538.5. DisclosuresIFRS 12 has been amended to require an investment entity to disclose the significant judgements and assumptionsthat it has made in determining that it is an investment entity. If an investment entity does not have all of the typicalcharacteristics of an investment entity it is required to disclose the reasons for concluding that it is nevertheless aninvestment entity.Other disclosures include:––The fact that investments in one or more subsidiaries are accounted for at fair value through profit or loss and notby consolidation––The facts and reasons for an entity becoming, or ceasing to be, an investment entity––The effect of a change of status on the financial statements when an entity becomes an investment entity (totalfair value, total gain or loss and identification of the line item in which the gain or loss has been recognised)––Specified information about unconsolidated subsidiaries (e.g. name, place of business, percentage held). Aninvestment entity that is a parent of another investment entity is required to provide this information aboutunconsolidated subsidiaries that are controlled by its investment entity subsidiary––The nature and extent of significant restrictions on the ability of an unconsolidated subsidiary to transfer funds tothe investment entity (e.g. cash dividends or repayment of loans or advances)––Any current commitments or intentions to provide financial or other support to an unconsolidated subsidiary,including commitments or intentions to assist the subsidiary in obtaining financial support––Details of financial or other support provided to unconsolidated subsidiaries by the investment entity or itssubsidiaries without having a contractual obligation to do so––The terms of contractual arrangements that could require the entity (or its unconsolidated subsidiaries) to providefinancial support to an unconsolidated, controlled, structured entity, including circumstances that could expose thereporting entity to a loss––Details of financial or other support provided to an unconsolidated, structured entity that resulted in theinvestment entity controlling the structured entity, where the financial or other support was provided by theinvestment entity (or its unconsolidated subsidiaries) without having a contractual obligation to do.
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Need to Know: IFRS 10 - Consolidated Financial ... - BDO Canada

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