International GAAP® 2019: Generally Accepted Accounting Practice under International Financial Reporting Standards
Page 971
Consistent accounting policies, Ch. 7, 2.6; Ch. 11, 7.8. See also
physical capital maintenance, Ch. 2, 11.2
Financial statements, presentation of; IAS 1
political and economic environment influences, Ch. 2, 1.2
Consolidated financial statements, Ch. 6, 1–11; Ch. 8, 1.1. See
presentation and disclosure, Ch. 2, 10
also consolidation procedures, IFRS 10
aggregation, Ch. 2, 10.3
continuous assessment, Ch. 6, 9
classification, Ch. 2, 10.2
control, Ch. 6, 3
objectives and principles, Ch.2, 10.1
control of specified assets, Ch. 6, 8
purpose, Ch. 2, 3.2
employee benefit trusts, Ch. 30, 12.3, 12.4.1, 12.5.1
recognition criteria, Ch. 2, 8.2
entity no longer a parent at the end of reporting period, Ch. 6,
faithful representation, Ch. 2, 8.2.2
2.2.4
relevance, Ch. 2, 8.2.1
exemption from preparing
recognition process, Ch. 2, 8.1
consent of non-controlling shareholders, Ch. 6, 2.2.1.A
reporting entity, Ch. 2, 6.2
not filing financial statements for listing securities, Ch. 6,
scope, Ch. 2, 3
2.2.1.C
standard settings, Ch. 2, 1.2
parent’s IFRS financial statements are publicly available,
status, Ch. 2, 3.2
Ch. 6, 2.2.1.D
useful financial information, qualitative characteristics of,
securities not traded in a public market, Ch. 6, 2.2.1.B
Ch. 2, 5
exposure to variable returns, Ch. 6, 5
Concession agreements. See Service concession arrangements (SCA)
future developments, Ch. 6, 11
mineral reserves and resources, Ch. 39, 2
investment entities, Ch. 6, 10
Concessionary agreements (concessions), extractive industries,
power over an investee, Ch. 6, 4
Ch. 39, 5.2
principal-agency situations, Ch. 6, 6
Condensed interim financial statements, Ch. 37, 3.2. See also
related parties and defacto agents, Ch. 6, 7
under IAS 34
Consolidated statement of cash flows, preparing, Ch. 36, 6.1
disclosures in, Ch. 37, 4
Consolidation procedures, Ch. 7. See also non-controlling
accounting policies and methods of computation, Ch. 37,
interests
4.3.13
basic principles, Ch. 7, 2.1
capital commitments, Ch. 37, 4.3.5
changes in control, Ch. 7, 3
changes in circumstances affecting fair values, Ch. 37, 4.3.7
accounting for a loss of control Ch. 7, 3.2
changes in classification of financial assets arising from
deemed disposal, Ch. 7, 3.6
changes in use, Ch. 37, 4.3.11
demergers and distributions of non-cash assets to owners,
changes in composition of the entity, Ch. 37, 4.3.20
Ch. 7, 3.7, Ch. 8, 2.4.2. See also IFRIC 17
changes in estimates, Ch. 37, 4.3.16
interest retained in the former subsidiary, Ch. 7, 3.3
compliance with IFRS, Ch. 37, 4.6
associate or joint venture, Ch. 7, 3.3.2, 7.1
contingent liabilities, Ch. 37, 4.3.12
financial asset, Ch. 7, 3.3.1
debt and equity securities, Ch. 37, 4.3.18
joint operation, Ch. 7, 3.3.3, 7.2
default or breach of loan covenants not remedied before
loss of control in multiple arrangements Ch. 7, 3.4
end of interim period, Ch. 37, 4.3.8
other comprehensive income, Ch. 7, 3.5
dividends paid for each class of share, Ch. 37, 4.3.18
changes in ownership interest without a loss of control, Ch. 7, 4
events after the interim reporting date, Ch. 37, 4.3.19
contingent consideration on purchase of a
fair value disclosures, Ch. 37, 4.5
noncontrolling interest Ch. 7, 4.5
fair value hierarchy levels, transfers between, Ch. 37, 4.3.10
goodwill attributable to non-controlling interests,
impairment, Ch. 37, 4.3.2
Ch. 7, 4.2; Ch. 20, 9
inventory write-down and reversals, Ch. 37, 4.3.1
non-cash acquisition of non-controlling interests,
litigation settlements, Ch. 37, 4.3.6
Ch. 7, 4.3
PP&E, acquisition and disposal of, Ch. 37, 4.3.4
reattribution of other comprehensive income, Ch. 7,
related party transactions, Ch. 37, 4.3.9
4.1
reversal of restructuring provisions, Ch. 37, 4.3.3
transaction costs, Ch. 7, 4.4
seasonality or cyclicality of operations, Ch. 37, 4.3.14
commencement and cessation of consolidation, Ch. 7, 3.1
segment information, Ch. 37, 4.4
acquisition of a subsidiary that is not a business, Ch. 7,
significant events and transactions, Ch. 37, 4.1
3.1.1
unusual amounts, Ch. 37, 4.3.15
demergers and distributions of non-cash assets to owners,
first-time presentation, Ch. 37, 11.1.1
Ch. 7, 3.7
requirements for interim financial information, Ch. 37, 3.3
presentation and disclosure, Ch. 7, 3.7.3
Consideration transferred, Ch. 9, 7. See also Contingent
recognition and measurement in IFRIC 17, Ch. 7,
consideration
3.7.2
acquisition-related costs, Ch. 9, 7.3
scope of IFRIC 17, Ch. 7, 3.7.1
112 Index
Consolidation procedures —contd
Contract modifications, Ch. 28, 4.4
consistent accounting policies, Ch. 7, 2.6
not a separate contract, Ch. 28, 4.4.2
consolidating foreign operations, Ch. 7, 2.3
represents a separate contract, Ch. 28, 4.4.1
intragroup eliminations, Ch. 7, 2.4
Contractual arrangement, business combinations, Ch. 6, 4.4
non-coterminous accounting periods, Ch. 7, 2.5
additional rights from, Ch. 6, 4.3.6
proportion consolidated, Ch. 7, 2.2, 5.5
with other vote holders, Ch. 6, 4.3.5
Constructive obligation, Ch. 27, 3.1
structured entities, Ch. 6, 4.4.1
employee benefits, Ch. 33, 7.1, 12.3.1
Contractual cash flows, financial instruments IFRS 9, Ch. 44, 6
provisions, Ch. 27, 3.1
auction rate securities, Ch. 44, 6.4.4
Consultative Group for Rate Regulation, Ch. 1, 2.9
bonds with a capped or floored interest rate, Ch. 44, 6.3.3
Contingent assets, Ch. 27, 3.2.2
contractual features that may affect the classification, Ch. 44, 6.4
definition, Ch. 27, 3.2.2
de minimis and non-genuine features, Ch. 44, 6.4.1
disclosure of, Ch. 27, 7.3
features that change the timing or amount of contractual
relating to business combinations, Ch. 9, 5.5.4.B
cash flows, Ch. 44, 6.4.4
Contingent consideration, Ch. 7, 4.5; Ch. 9, 7.1
prepayment – assets originated at a premium or
cash flows in business combinations, Ch. 36, 6.3.3.A
discount, Ch. 44, 6.4.4.B
payable by an acquirer, Ch. 41, 3.7.1.A
prepayment – negative compensation, Ch. 44, 6.4.4.A
receivable by a vendor, Ch. 41, 3.7.1.B
features that modify the consideration for the time value of
initial recognition and measurement, Ch. 9, 7.1.1
money, Ch. 44, 6.4.2
; intangible assets acquired for, Ch. 17, 4.5
features that normally do not represent payment of
obligation, classification, Ch. 9, 7.1.2
principal and interest, Ch. 44, 6.4.5
on purchase of non-controlling interest, Ch. 7, 4.5
regulated interest rates, Ch. 44, 6.4.3
subsequent measurement and accounting, Ch. 9, 7.1.3
contractual features that normally pass the test, Ch. 44, 6.3
bonds with a capped or floored interest rate, Ch. 44, 6.3.3
Contingent convertible bond, Ch. 43, 6.6.2
conventional subordination features, Ch. 44, 6.3.1
Contingent costs, investment property, Ch. 19, 4.10
features which compensate the lender for changes in tax or
Contingent liabilities, Ch. 27, 3.2.1
other related costs, Ch. 44, 6.3.6
business combinations, Ch. 9, 5.6.1
full recourse loans secured by collateral, Ch. 44, 6.3.2
definition, Ch. 27, 3.2.1
lender has discretion to change the interest rate, Ch. 44,
disclosure of, Ch. 27, 7.2
6.3.4
joint ventures and associates, Ch. 13, 5.2.2
unleveraged inflation-linked bonds, Ch. 44, 6.3.5
Contingent rents (IAS 17), Ch. 23, 3.4.7
contractually linked instruments, Ch. 44, 6.6
and embedded derivatives, Ch. 23, 3.4.7
assessing the characteristics of the underlying pool, Ch. 44,
and operating leases, Ch. 23, 3.4.7.A
6.6.1
Contingent resources, extractive industries, Ch. 39, 2.2.1
assessing the exposure to credit risk in the tranche held,
Contingent settlement provisions, Ch. 43, 4.3
Ch. 44, 6.6.2
contingencies that are ‘not genuine,’ Ch. 43, 4.3.1
conventional subordination features, Ch. 44, 6.3.1
liabilities that arise only on a change of control, Ch. 43, 4.3.3
convertible debt, Ch. 44, 6.4.5
liabilities that arise only on liquidation, Ch. 43, 4.3.2
de minimis features, Ch. 44, 6.4.1.A
some typical contingent settlement provisions, Ch. 43, 4.3.4
debt covenants, Ch. 44, 6.4.4.B
dual currency instruments, Ch. 44, 6.4.5
Contingently issuable shares (EPS), Ch. 33, 6.4.6
five-year constant maturity bond, Ch. 44, 6.4.2
earnings-based contingencies, Ch. 33, 6.4.6.A
fixed rate bond prepayable by the issuer at fair value, Ch. 44,
share-price-based contingencies, Ch. 33, 6.4.6.B
6.4.5
Continuous assessment of control, Ch. 6, 9; Ch. 12, 8
full recourse loans secured by collateral, Ch. 44, 6.3.2
bankruptcy filings, Ch. 6, 9.2
interest rate period, Ch. 44, 6.4.2
changes in market conditions, Ch. 6, 9.1
inverse floater, Ch. 44, 6.4.5
control re-assessment, Ch. 6, 9.3
investment in open-ended money market or debt funds,
joint arrangements, Ch. 12, 8
Ch. 44, 6.4.5
troubled debt restructurings, Ch. 6, 9.2
lender has discretion to change the interest rate, Ch. 44, 6.3.4
Contract asset, Ch. 28, 11.1
loan commitments, Ch. 44, 6.4.6
presentation requirements for, Ch. 28, 11.1
meaning of ‘interest,’ Ch. 44, 6.2
Contract costs, Ch. 28, 10.3
meaning of ‘principal’, Ch. 44, 6.1
amortisation of capitalised costs, Ch. 28, 10.3.3
modified time value of money component, Ch. 44, 6.4.2
costs to fulfil a contract, Ch. 28, 10.3.2
multiple of a benchmark interest rate, Ch. 44, 6.4.5
assets recognised from, Ch. 28, 11.4.3
non-genuine features, Ch. 44, 6.4.1.B
costs to obtain a contract, Ch. 28, 10.3.1
non-recourse assets, Ch. 44, 6.5
impairment of capitalised costs, Ch. 28, 10.3.4
non-recourse loans, Ch. 44, 6.5
Contract liability, Ch. 28, 11.1.1.1E
perpetual instruments with potentially deferrable coupons,
presentation requirements for, Ch. 28, 11.1
Ch. 44, 6.4.5
Index
113
prepayment, assets originated at a premium or discount,
incidence of use of the cost model, Ch. 19, 7.2
Ch. 44, 6.4.4.B
initial recognition, Ch. 19, 7.1
prepayment, negative compensation, Ch. 44, 6.4.4.A
property, plant and equipment, Ch. 18, 5
prepayment options, Ch. 44, 6.4.4
depreciable amount, Ch. 18, 5.2
regulated interest rates, Ch. 44, 6.4.3
depreciation charge, Ch. 18, 5.3
unleveraged inflation-linked bonds, Ch. 44, 6.3.5
depreciation methods, Ch. 18, 5.6
Contractual-legal criterion (intangible assets), Ch. 9, 5.5.2
impairment, Ch. 18, 5.7
Contractual service margin (CSM), insurance contracts, Ch. 52,
land, Ch. 18, 5.4.2
8.5
repairs and maintenance, Ch. 18, 5.4.1
measurement of, using the variable fee approach, Ch. 52, 11.2.2
residual values, Ch. 18, 5.2
recognition of in profit or loss, Ch. 52, 11.2.5
significant parts of assets, Ch. 18, 5.1
release of, Ch. 52, 10.4.1
technological change, Ch. 18, 5.4.3
subsequent measurement, Ch. 52, 8.6.2
useful lives, Ch. 18, 5.4
when depreciation starts, Ch. 18, 5.5
Contractually linked instruments, Ch. 44, 6.6
assessing the characteristics of the underlying pool, Ch. 44, 6.6.1
Costs of hedging, accounting for, Ch. 49, 7
assessing the exposure to credit risk in the tranche held,
foreign currency basis spreads in financial instruments, Ch. 49,
Ch. 44, 6.6.2
7.5.3
measurement of the costs of hedging for, Ch. 49, 7.5.3.A
Control, Ch. 6, 3; Ch. 12, 4
transition, Ch. 49, 13.3.3
assessing control, Ch. 6, 3.1
forward element of forward contracts, Ch. 49, 7.5.2
changes in control ( See Consolidation procedures)
forward element in net investment hedge, Ch. 49, 7.5.2.A
common control, Ch. 6, 2.2.6.A
transition, Ch. 49, 13.3.2
de facto control, Ch. 6, 4.3.3
time value of options, Ch. 49, 7.5.1
joint, Ch. 12, 4
aligned time value, Ch. 49, 7.5.1.A
potential voting rights, Ch. 6, 4.3.4
transition, Ch. 49, 13.3.1
purpose and design of investee, Ch. 6, 3.2
of specified assets, Ch. 6, 8
Council of European Securities Regulators (CESR), Ch. 1, 5
of silo, evaluating, Ch. 6, 8.2
Credit break clauses, Ch. 49, 3.2.4
Controlling relationships, disclosure of, Ch. 35, 2.4
Credit card arrangements, Ch. 28, 3.4.1.C
Convergence, IFRS/US GAAP, Ch. 1, 3.2
Credit card-holder rewards programmes, Ch. 28, 3.4.1.D
Convertible bonds, Ch. 43, 6.6
Credit enhancements, Ch. 47, 6.1.1, 5.5.1.A; Ch. 48, 5.4.4
bond convertible into fixed percentage of equity, Ch. 43, 6.6.6
Credit guarantees, Ch. 48, 4.3
with cash settlement at the option of the issuer, Ch. 43, 6.6.5
Credit-linked notes, Ch. 42, 5.1.7
contingent convertible bond, Ch. 43, 6.6.2
Credit losses. See Expected credit losses (ECLs)
with down round or ratchet features, Ch. 43, 6.6.7
Credit risk, Ch. 50, 5.3
foreign currency convertible bond, Ch. 43, 6.6.4
changes in, calculating gain/loss attributable to, Ch. 47, 6.2.1
functional currency bond convertible into a fixed number of
counterparty
shares, Ch. 43, 6.6.1
fair value measurement, Ch. 14, 12.2.2
issued to acquire goods/services, Ch. 30, 10.1.6
valuation of derivative transactions, Ch. 14, 11.3.2
mandatorily convertible bond, Ch. 43, 6.6.3
disclosures, Ch. 51, 11.2.6.A
Convertible debt instruments, Ch. 42, 5.1.8
exposure, Ch. 50, 5.3.4
Convertible instruments (EPS), Ch. 33, 6.4.1
of financial instrument, Ch. 50, 5.3
convertible debt, Ch. 33, 6.4.1.A
hedging, Ch. 49, 12.1
convertible preference shares, Ch. 33, 6.4.1.B
illustrative disclosures, Ch. 50, 5.3.6
participating equity instruments, Ch. 33, 6.4.1.C
impact on hedged item, Ch. 49, 6.4.2.A
Convertible loans, Ch. 50, 7.4.4.B
impact on hedging instrument, Ch. 49, 6.4.2.B, 7.4.6
Core deposits, Ch. 39, 2.6.7
incorporation into valuation of derivative contracts, Ch. 14,
Core inventories, extractive industries, Ch. 39, 14.3
11.3.3
management practices, Ch. 50, 5.3.2
Corporate assets, Ch. 20, 4.2
significant increases in, determining, Ch. 47, 6
Cost of investment, Ch. 8, 2.1.1
change in the risk of a default occurring, Ch. 47, 6.1
acquired for own shares or other equity instruments, Ch. 8,
contractually linked instruments (CLIs) and
2.1.1.A
subordinated interests, Ch. 47, 6.1.2
acquired in a common control transactions, Ch. 8, 2.1.1.B
determining change in risk of a default under loss rate
formation of a new parent, Ch. 8, 2.1.1.D–E
approach, Ch. 47, 6.1.3
subsidiary, associate or joint venture acquired in stages, Ch. 8,
impact of collateral, credit enhancements and financial
2.1.1.C
guarantee contracts, Ch. 47, 6.1.1
Cost model
collective assessment, Ch. 47, 6.5
investment property, Ch. 19, 7
basis of aggregation for collective assessment, Ch. 47,
impairment, Ch. 19, 7.3
6.2.2
114 Index
Credit risk —contd
measured at fair value through other comprehensive income,
significant increases in, determining —contd
Ch. 47, 9
collective assessment —contd
term extension and similar call, put and prepayment options
example of collective assessment (‘bottom up’ and ‘top
in, Ch. 42, 5.1.3
down’ approach), Ch. 47, 6.5.1
Debt investments, foreign currency, Ch. 47, 9.2