Galino, Julie Anne A. Class No.
19
BSA12KA3 CFAS
PFRS 12 – DISCLOSURE OF INTEREST IN OTHER Examples of aggregation levels that may be
ENTITIES appropriate are:
NATURE Nature of activities.
Industry classification.
Definition of Terms
Geography.
Structured entity – An entity that has been
Scope
designed so that voting or similar rights are not
the dominant factor in deciding who controls the IFRS 12 shall be applied by an entity that has an
entity, such as when any voting rights relate to interest in ANY of the following:
administrative tasks only and the relevant
activities are directed by means of contractual Subsidiaries
arrangements. Joint arrangements (joint operations or
joint ventures)
Income from structured entity – Income from a Associates
structured entity includes, but is not limited to, Unconsolidated structured entities.
recurring and non-recurring fees, interest,
dividends, gains or losses on the re-measurement
or derecognition of interests in structured IFRS 12 does not apply to:
entities and gains or losses from the transfer of
assets and liabilities to the structured entity. Post-employment benefit plans or other
long-term employee benefit plans to
IFRS 12 emphasises that it’s necessary for which IAS 19 Employee Benefits applies.
financial statement preparers to strike a balance An entity’s separate financial statements
between burdening financial statements with to which IAS 27 Separate Financial
excessive detail that may not assist users of Statements applies.
financial statements and obscuring information An interest held by an entity that
as a result of too much aggregation. participates in, but does not have joint
An entity shall present information separately for control or significant influence over a
the following interests (i.e. aggregation is not joint arrangement.
allowed): An interest accounted for in accordance
with IFRS 9 Financial Instruments, except
Subsidiaries for:
Joint ventures - Interest in an associate or joint venture
Joint operations measured at fair value through profit or
Associates loss in accordance with
Unconsolidated structured entities. IAS 28 Investments in Associates and
Joint Ventures; or
An entity shall consider the following when
- Interest in an unconsolidated structured
determining whether to aggregate information:
entity.
Quantitative and qualitative information
Effective date
about the risk and return characteristics
of each entity considered for possible IFRS 12 shall be applied for annual
aggregation; and periods beginning on or after 1 January
The significance of each entity to the 2013. An entity shall apply those
reporting entity. amendments made to IFRS 12 with
regards to Investment Entities for annual
Galino, Julie Anne A. Class No. 19
BSA12KA3 CFAS
periods beginning on or after 1 January The above disclosures shall also be provided
2014. Early application is permitted. by an investment entity parent for
investments that are controlled by its
Significant judgements and assumptions
investment entity subsidiary.
Information about significant judgements and
An investment entity shall also disclose:
assumptions (including changes to those
judgements and assumptions) made by an entity The nature and extent of any significant
in determining the following should be disclosed: restrictions on the ability of an
unconsolidated subsidiary to transfer
That it has control of another entity;
funds to the investment entity in the
That it has joint control of an
form of cash dividends, or to repay loans
arrangement or significant influence over
or advances made by the investment
another entity; and
entity; and
The type of joint arrangement (joint
Any current commitments or intentions
operation or joint venture) when it has
to provide or assist in obtaining financial
been structured through a separate
or other support to an unconsolidated
vehicle.
subsidiary.
Examples of situations that require disclosure
The entity:
Does not control another entity even
though it holds more than half of the
voting rights.
Controls another entity even though it
holds less than half of the voting rights.
Is a principal or an agent.
Does not have a significant influence
even though it holds 20% or more of the
voting rights.
Has significant influence even though it
holds less than 20% of the voting rights.
Interest in unconsolidated subsidiaries
(Investment entities)
An investment entity shall disclose the following
for each unconsolidated subsidiary:
The name of the subsidiary;
The principal place of business and
country of incorporation of the
subsidiary; and
The proportion of ownership interests
held by the investment entity and if
different, the proportion of voting rights
held.
