Český finanční a účetní časopis 2014(4):57-69 | DOI: 10.18267/j.cfuc.423

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

Marie Zelenková
Ing. Marie Zelenková, Ph.D. - odborná asistentka; Katedra finančního účetnictví a auditingu, Fakulta financí a účetnictví, Vysoká škola ekonomická v Praze, nám. W. Churchilla 4, 130 67 Praha 3; <zelenm@vse.cz>.

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 IFRS 11 Joint Arrangements that fully superseded IAS 31 Interests in Joint Ventures become effective for financial statements for annual periods beginning on or after 1 January 2013.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.
JEL classification: M41

Published: December 1, 2014  Show citation

ACS AIP APA ASA Harvard Chicago Chicago Notes IEEE ISO690 MLA NLM Turabian Vancouver
Zelenková, M. (2014). Transition from proportionate consolidation method to the equity method according to IFRS. Czech Financial and Accounting Journal, 2014(4), 57-69. doi: 10.18267/j.cfuc.423
Download citation
  • BibTeX (.bib)
  • Bookends (.ris)
  • EasyBib (.ris)
  • EndNote (.enw)
  • EndNote 8 (.xml)
  • ISI WoS (.isi)
  • Medlars (.medlars)
  • Mendeley (.ris)
  • MODS (.xml)
  • Papers (.ris)
  • RefWorks (.txt)
  • RefManager (.ris)
  • RIS (.ris)
  • MS Word (.xml)
  • Zotero (.ris)
    • Open full article

    References

    1. Alfredson, K. aj. (2007): Applying International Financial Reporting Standards. Hoboken, Wiley, 2007.
    2. Ernst & Young (2011): Challenges in adopting and applying IFRS 11. Ernst & Young, 2011, [cit. 31. 3. 2014], <http://www.ey.com/Publication/vwLUAssets/Applying_IFRS_11/$File/Applying_IFRS _11.pdf>.
    3. IASB (2011): Basis for Conclusions on IFRS 11 Joint Arrangements. London, IFRS Foundation, 2011.
    4. IASCF (2005): Mezinárodní standard účetního výkaznictví (IFRS). Praha, Svaz účetních, 2005.
    5. Picker R. aj. (2012): Applying International Financial Reporting Standards. Hoboken, Wiley, 2012.
    6. Taylor, P. A. (1996): Consolidated financial reporting. London, Paul Chapman, 1996. Go to original source...
    7. Zelenka, V. (2006): Goodwill, principy vykazování v podniku. Praha, Ekopress, 2006.
    8. Zelenka, V. - Zelenková, M. (2011a): Nové a novelizované IFRS týkající se konsolidace a ekvivalenční metody. Finanční řízení & controlling v praxi, 2011, roč. 2, č. 9, s. 21-27.
    9. Zelenka, V. - Zelenková, M. (2011b): Základy konsolidačních metod. Finanční řízení & controlling v praxi, 2011, roč. 2, č. 7-8, s. 33-38. Go to original source...
    10. Zelenka, V. - Zelenková, M. (2013): Konsolidace účetních výkazů. Principy a praktické aplikace. Praha, Ekopress, 2013.

    This is an open access article distributed under the terms of the Creative Commons Attribution 4.0 International License (CC BY 4.0), which permits use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.


    Return to the content