New UK GAAP 2015: Application of FRS 100-102 in the UK

Chapter 10 Investments in associates

1 Introduction

2 Comparison between Section 14, previous UK GAAP and IFRS

   2.1 Key differences to previous UK GAAP

       2.1.1 Significant influence

       2.1.2 Measurement – entity that is not a parent

       2.1.3 Investment portfolios

       2.1.4 Implicit goodwill and fair value adjustments

       2.1.5 Losses in excess of investment

   2.2 Key differences to IFRS

       2.2.1 Measurement – entity that is not a parent

       2.2.2 Investment portfolios / funds

       2.2.3 Acquisition accounting

       2.2.4 Loss of significant influence where the associate does not become a subsidiary or jointly controlled entity

3 Requirements of Section 14 for investments in associates

   3.1 Introduction

       3.1.1 Scope

       3.1.2 Terms used in Section 14

   3.2 Definitions of an associate, and related terms

       3.2.1 Associate

       3.2.2 Significant influence

1. 3.2.2.A Lack of significant influence
2. 3.2.2.B Holdings of less than 20% of the voting power
3. 3.2.2.C Potential voting rights
4. 3.2.2.D Voting rights held in a fiduciary capacity

   3.3 Measurement

       3.3.1 Accounting policy options

1. 3.3.1.A Investor not a parent
2. 3.3.1.B Investor that is a parent

       3.3.2 Equity method

1. 3.3.2.A Date of commencement of equity accounting
2. 3.3.2.B Distributions and other adjustments to carrying amount
3. 3.3.2.C Potential voting rights and share of the investee
4. 3.3.2.D Implicit goodwill and fair value adjustments
5. 3.3.2.E Impairment
6. 3.3.2.F Investor’s ...