Transition from proportionate consolidation method to the equity method according to IFRS

Přechod z poměrné metody konsolidace na metodu ekvivalence podle IFRS

Marie Zelenková

Český finanční a účetní časopis, 2014, vol. 2014, issue 4, 57-69

Abstract: The article deals with transition from consolidated financial statements reported by proportionate consolidation method to these reported by equity method. IFRS 11 Joint Arrangements that fully superseded IAS 31 Interests in Joint Ventures become effective for financial statements for annual periods beginning on or after 1 January 2013. IFRS 11 doesn't enable to use both alternative methods, i.e. proportionate consolidation and equity method. This standard allows only equity method for accounting for joint control over joint venture. Venturers that had prepared financial statements by proportionate consolidation method to that date must apply equity method for financial reporting now. The aim of this paper is to present application guidance of transition from proportionate consolidation to equity method according to requirements of IFRS 11 and to refer to specific problems relating to this transition.

Keywords: Equity method; IFRS; Consolidated financial statements; Proportionate consolidation method; Joint ventures; Venturer; Ekvivalenční metoda; Konsolidovaná účetní závěrka; Poměrná metoda konsolidace; Společná podnikání; Spoluovládající jednotka (search for similar items in EconPapers)
JEL-codes: M41 (search for similar items in EconPapers)
Date: 2014
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DOI: 10.18267/j.cfuc.423

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