Project 1

AC3102
Group Presentation 1
Seminar Group 10
Instructor: Dr. James Kwan
Done by:
Tan Sock Min
Aloysius Loong Yi Yee
Joie Chia Le Yi
Rachel Lee Pei Jing 1
Question 1
2
On 1 January 20x5, Phanpy Ltd (P) acquired 100% of the voting
rights in Mantine Ltd (M), which was in the yacht-building
business. On the other hand, P engaged in selling and chartering
yachts to other parties. On 1 January 20x7, P contracted M to
build a yacht that P designed over the next two years. Given the
nature of the contract, M would recognise revenue from the
contract over time on a percentage-of-completion basis
under FRS 115 Revenue from Contracts with Customers.
Assuming that the contract was expected to be profitable
during and at the end of the construction.
3
engaged in selling and chartering yachts
Phanpy Ltd
to other parties
1 Jan 20x5 1 Jan 20x7 31 Dec 20x8

Phanpy Ltd (P) P contracted M to State the
acquired 100% of build a yacht that P consolidation
the voting rights in designed over the journal entries
Mantine Ltd (M) next two years
4
On: 1 Jan 20x5
Phanpy Ltd (P) Question: Does P have control over M?

Why?
100%
Mantine Ltd (M)
5
On: 1 Jan 20x5
SFRS (I) 10:5-18

An investor controls an investee if
and only if the investor has all of the
Phanpy Ltd (P)
following:
- Power over the investee
100% - Exposure, or rights to variable
returns from its involvement with
the investee, and
Mantine Ltd (M) - The ability to use its power over
the investee to affect the
amount of the investor’s returns
6
Phanpy Ltd (P)
P contracted M
100% to build a
yacht
Mantine Ltd (M)
Question: Is this an upstream or downstream sale?
7
Phanpy Ltd (P)
P contracted M
100% to build a
yacht =
Mantine Ltd (M) upstream sale
Downstream sale: Sale by parent to subsidiary

Upstream sale: Sale by subsidiary to parent
8
(a) State the consolidation journal entries related to the
construction contract necessary for the preparation of the 20x8
consolidated financial statements for Phanpy Ltd Group.
9
Concept
SFRS(I) 10:B86 Consolidated financial statements

(a) combine like items of assets, liabilities, equity, income, expenses and
cash flows of the parent with those of its subsidiaries.
(b) offset (eliminate) the carrying amount of the parent’s investment in
each subsidiary and the parent’s portion of equity of each subsidiary
(c) eliminate in full intra group assets and liabilities, equity, income,
expenses and cash flows relating to transactions between entities of
the group (profits or losses resulting from intragroup transactions that
are recognised in assets, such as inventory and fixed assets, are
eliminated in full). Intragroup losses may indicate an impairment that
requires recognition in the consolidated financial statements.
10
Phanpy Ltd (P) - Parent’s JE Mantine Ltd (M) - Subsidiary’s JE
On the incurrence of expenses related to the construction
Assume no Fair Value Differential
No entry Dr Contract Assets

Cr Cash
Cr Other Trade Payable
Cr Accumulated
Depreciation/Other Expenses
11
On progress billing
Dr Construction in-progress (Yacht) Dr Accounts Receivable

Cr Accounts Payable Cr Contract Assets
12
Upon collection
Dr Accounts Payable Dr Cash

Cr Cash Cr Accounts Receivable
13
On recognition of construction profit for the period
No entry Dr Contract Assets

Cr Construction Revenue
Dr Construction Expenses
Cr Contract Assets
14
Assuming that the construction contract concluded in 20x8
Dr Inventory (Yacht)
Cr Construction in-progress
(Yacht)
15
20x8’s Consolidated JE for Phanpy Ltd Group
CJE 1
Dr Accounts Payable (in P’s books)

Cr Accounts Receivable (in M’s books)
(To eliminate progress billing)

CJE 2
Dr Accounts Receivable (in M’s books)

Cr Accounts Payable (in P’s books)
(To eliminate cash collection)

16
CJE 3
Dr Construction Revenue
Cr Inventory (Yacht)
Cr Contract Expense
(To eliminate current year profit arising from construction contract)
17
CJE 4
Dr Beginning Retained Earnings

Cr Inventory (Yacht)
(To eliminate 20x7’s profit from construction contract)
18
Recognising Tax Differences
Question: Given the 4 CJEs explained, if

we were to consider tax effects, will there
be further CJEs needed?
19
If tax effects were to be considered
CJE 5
Dr Deferred Tax Asset (DTA)

Cr Tax Expense
(Tax effect adjustments for CJE 3)
20
(b) If Phanpy Ltd held only 75% of the voting rights in
Mantine Ltd, explain how the computation of the group profit
after tax attributable to the non-controlling interest would be
affected by the inter-company construction contract.
21
Phanpy Ltd (P)
P contracted M
75% to build a
yacht
Non-controlling 25%
Mantine Ltd (M)
Interests (NCI)
SFRS (I) 10:B94

An entity shall attribute the profit or loss and each component of
other comprehensive income to the owners of the parent and to the
non-controlling interests. The entity shall also attribute total
comprehensive income to the owners of the parent and to the
non-controlling interests even if this results in the non-controlling
interests having a deficit balance. 22
Phanpy Ltd (P)
P contracted M
75% to build a
yacht =
Non-controlling 25% upstream sale
Mantine Ltd (M)
Interests (NCI)
Question: Are there any adjustments for upstream sale? Why?
23
Phanpy Ltd (P)
P contracted M
75% to build a
yacht =
Non-controlling 25% upstream sale
Mantine Ltd (M)
Interests (NCI)
Upstream sale: Adjust NCI share in unrealised profit or losses

as unrealised profit resides in subsidiary
24
Question states: Assume that the contract was expected to be
profitable during and at the end of the construction. Our group will
assume that there is unrealised profit.
P (parent) owns 75% of M, thus, 25% is attributable to NCI. Since it
is an upstream sale, unrealised profit resides in M (subsidiary).
Thus, we need to adjust NCI share in the unrealised profit.
25
Example: Assume adjusted profit after tax of $1,000.
P owns 75%, NCI owns 25%.

Non-controlling interests = 25% x $1,000 = $250
Dr Non-controlling Interests (P/L) $250
Cr Non-controlling Interests (SFP) $250
26
Question 2
27
In general, explain how the consolidated financial statements
reflect the single economic concept and the distinction
between control and ownership.
28
What is consolidation?
Combined financial statements of a parent company and its subsidiaries
Presents an aggregated look at the financial position of a parent company

and its subsidiaries
Provides a picture of the overall health of an entire group of companies as

opposed to one company's standalone position
29
Consolidation Process
Eliminate the effects Elimination of

Items of
of any unrealized profit
assets/liabilities
inter-company or loss on the
and
balances and sale of assets
income/expense
transactions, as if between the
are added as if
the transactions did parent and its
one single entity
not occur subsidiaries
30
What is the single economic entity concept?
Companies associated with each other through the virtue of

common control operate as a single economic unit
31
Control
SFRS (I) 10:6

An investor controls an investee when it is exposed, or has rights, to
variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the investee
SFRS (I) 10:7

3 Main Attributes of Control
Question: What are the criteria to determine control?
SFRS (I) 10:10
Existing rights to direct relevant activities
32
Control
SFRS (I) 10:7

The ability to use Exposure, or rights to

Power over the
its power over the variable returns from
investee
investee to affect its involvement with
the amount of the the investee, and
investor’s returns
33
Control
SFRS (I) 10:6

An investor controls an investee when it is exposed, or has rights, to
variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the investee
SFRS (I) 10:7

SFRS (I) 10:10

Existing rights to direct relevant activities
34
Control
SFRS (I) 10 Appendix A

Defines consolidated FS as:
The financial statements of a group in which the assets, liabilities,

equity, income, expenses and cash flows of the parent and its
subsidiaries are presented as those of a single economic entity.
35
Ownership
SFRS (I) 10:27

Investment entity
SFRS (I) 10:28 (d)

Has ownership interests in the form of equity of similar interests
36
Control vs Ownership
The consolidated financial To show “ownership”, that

statements reflect “control” part of Subsidiary’s net
by including all (100%/full) assets and results included
assets/liabilities and in the CFS but not owned by
income/expense regardless Parent is presented as
of % interests as Parent has Non-controlling Interests.
control over the net assets NCI is classified as part of
and results (operations). Equity (though separately
from Parent’s Equity).
37
Distinction between control and ownership
Example: Changi Airport Group AY 18-19 Financial Statements
38
39
40
Further Examples
Source: DBS Holdings

Group Ltd Annual Report
2019
Shows the group’s

maximum exposure to
loss is treated in relation
to unconsolidated
structured entities (not
controlled by the group)
41
Further Examples
Source: Walt Disney Company Annual Report FY2019

Shows the
increase in
ownership
interest in Hulu
due to
acquisition of
Twenty-First
Century Fox, Inc
42
Further Examples

Before Walt Disney Company acquired Twenty-First Century Fox (TFCF):
Twenty-First
Century Fox (TFCF)
30%
Non-controlling 70%
Hulu LLC
Interests (NCI)
Out of this 70% of NCI, Walt Disney Company holds 30%

43
Further Examples

After Walt Disney Company acquired Twenty-First Century Fox (TFCF):
Walt Disney
Company
100%
Twenty-First 30% + 7%
Century Fox (TFCF)
30%
NBC Universal 33%
Hulu LLC
(NCI)
44
Further Examples

After Walt Disney Company acquired Twenty-First Century Fox (TFCF):
- Walt Disney Company had 60% (30% + 30%) ownership interest in Hulu
LLC
- It increased 7% to 67% (60% + 7%) ownership interest in Hulu LLC on
15 April 2019
45
Further Examples
Source: Starhill Global REIT Annual

Report FY 2018/19
Starhill Global REIT uses SPVs or

subsidiaries to hold overseas
properties
46
Further Examples
Source: Starhill Global REIT Annual Report FY 2018/19
47
Further Examples
The SPV is wholly

owned by Starhill
Global REIT and is
consolidated
48
Further Examples
Starhill Global
REIT
considered an
intermediary in
a complex
group structure.
49
Further Examples
50
Further Examples
Source: Aberdeen Annual Report and Accounts 2019
Control of
investment
vehicles/assets to
be considered in
consolidation
process
51
Further Examples
52
Further Examples
53
Question 3
54
Research “Announcements” made by companies listed on the
Singapore Exchange (“SGX”) pertaining to “Asset Acquisitions
and Disposals” in the recent five years.
Select one or more companies that had completed one or more
business combinations (involving subsidiaries) and/or
investments in other entities (involving associates and joint
arrangements).
Review their financial statements for one or more financial

years subsequent to those business combinations/investments.
55
Required:
Using extracts of the financial statements of the company/ies that

you have selected, highlight and explain the following:
(a) Preparation and presentation of the financial statements by
outlining the requirements for preparation and presentation
of financial statements for companies incorporated under the
Companies Act in Singapore; and
(b) Extracts of “line items” from the face of the financial
statements and “Notes to the Financial Statements”
pertaining to consolidation of financial statements. Outline the
relevant accounting policies/treatment and include
reference to the specific requirements of the SFRS (I).
56
About Spackman Entertainment Group
Motion picture and video production company
Listed on SGX Catalist Board in July 2014
Drama Talent
Theatrical Film Production Management
- Zip Cinema - Spackman entertainment - Spackman media
- Take Pictures - Greenlight Content - Constellation
- Simplex Films Agency
57
Group Structure
58
Disposal of: Acquisition of:

- Opus Pictures Limited (indirect 100% equity interest in
wholly‐owned subsidiary) Greenlight Content Limited in
- UAA Korea Co., Ltd (indirect 51.50% October 2018
subsidiary) in September 2016
59
(a) Preparation and presentation of the financial statements by outlining the
requirements for preparation and presentation of financial statements for
companies incorporated under the Companies Act in Singapore
Annual Report 2016 Annual Report 2019 60

Companies Act s201 (1): The directors of every company must lay before
the company at its annual general meeting the financial statements for the
financial year in respect of which the annual general meeting is held.
AGM was held on 29 June 2020
61
Companies Act s201 (1): The directors of every company must lay before
the company at its annual general meeting the financial statements for the
financial year in respect of which the annual general meeting is held.
62
Companies Act s201 (2): Subject to subsections (12) to (15), the financial
statements referred to in subsection (1) shall comply with the
requirements of the Accounting Standards and give a true and fair view
of the financial position and performance of the company.
63
Companies Act s201 (5): Subject to subsections (12) to (15), the
directors of a company that is a parent company at the end of its
financial year need not comply with subsection (1) but must cause to
be made out and laid before the company at its annual general
meeting —
(a) consolidated financial statements dealing with the financial

position and performance of the group for the financial year in
respect of which the annual general meeting is held; and
(b) a balance-sheet dealing with the state of affairs of the parent

company at the end of its financial year, each of which
complies with the requirements of the Accounting Standards
and gives a true and fair view of the matters referred to in
paragraph (a) or (b), as the case may be, so far as it concerns
members of the parent company.
64
Companies Act s201 (20): For the purposes of subsections (1) and (5),
a reference to the preceding financial statements includes the
profit and loss account, balance-sheet and consolidated accounts
required to be laid before the company at its annual general
meeting under section 201 in force before the date of commencement
of section 116 of the Companies (Amendment) Act 2014.
65
(a) consolidated
financial statements
66
(a) consolidated
67
(b) balance-sheet dealing
with the state of affairs of
the parent company
68
Companies Act s201 (7): The directors shall (before the financial
statements referred to in subsection (1) and the balance-sheet referred
to in subsection (5)(b) are made out) take reasonable steps —
(a) to ascertain what action has been taken in relation to the writing off
of bad debts and the making of provisions for doubtful debts
69
Companies Act s201 (7):
(b) to ascertain whether any current assets (other than current

assets to which paragraph (a) applies) are unlikely to realise in
the ordinary course of business their value as shown in the
accounting records of the company and, if so, to cause —
(i) those assets to be written down to an amount which they
might be expected so to realise; or
(ii) adequate provision to be made for the difference between
the amount of the value as so shown and the amount that they
might be expected so to realise; and
70
Companies Act s201 (7):
(c) to ascertain whether any non-current asset is shown in the books of

the company at an amount which, having regard to its value to the
company as a going concern, exceeds the amount which would be
recoverable over its useful life or on its disposal
71
Directors need to
take reasonable
steps to ascertain
Companies Act
s201 (7)
72
Companies Act s201
(8): The financial
statements shall be
duly audited before
they are laid before
the company at its
annual general
meeting as required by
this section, and the
auditor’s report
required by section 207
shall be attached to or
endorsed upon those
financial statements.
73
Companies Act s201
(8): The financial
statements shall be
duly audited before
they are laid before the
company at its annual
general meeting as
required by this
section, and the
auditor’s report
required by section
207 shall be attached
to or endorsed upon
those financial
statements. 74
SFRS (I) 1-1: 81B An entity shall present the following items, in addition to
the profit or loss and other comprehensive income sections, as allocation
of profit or loss and other comprehensive income for the period:
(a) profit or loss for the period attributable to:
(i) non-controlling interests, and (ii) owners of the parent
(b) comprehensive income for the period attributable to:
(i) non-controlling interests, and (ii) owners of the parent
75
(b) Extracts of “line items” from the face of the financial statements and
“Notes to the Financial Statements” pertaining to consolidation of
financial statements. Outline the relevant accounting policies/treatment
and include reference to the specific requirements of the SFRS (I).
Annual Report 2016 Annual Report 2019 76

Investment in Subsidiary
77
Investment in Subsidiary
78
SFRS(I) 10:B88
SFRS(I) 10:B86
SFRS(I) 3:37- 40
- Consideration
transferred
- Contingency
consideration
SFRS(I) 3:32 & 34
- Goodwill
- Bargain purchase
79
SFRS(I) 10:22
A parent shall present non-controlling interests in the
consolidated statement of financial position within equity,
separately from the equity of the owners of the parent.
SFRS(I) 10:B94 80
SFRS(I) 3:6-7 Control
An investor controls an investee when it is exposed, or has rights,
to variable returns from its involvement with the investee and has
the ability to affect those returns through its power over the
investee.
81
SFRS(I) 1-36:90 & 124
- Testing of impairment of goodwill annually when there is
indication that unit may be impaired
(Carrying amount > Recoverable amount = Impaired)
- An impairment loss recognised for goodwill shall not be
reversed in a subsequent period.
82
SFRS(I) 10:B86
(a) combine like items of assets, liabilities, equity, income,
expenses and cash flows of the parent with those of its subsidiaries
(b) offset (eliminate) the carrying amount of the parent’s investment
in each subsidiary and the parent’s portion of equity of each
subsidiary 83
SFRS(I) 10:B86
(c) eliminate in full intragroup assets and liabilities, equity,
income, expenses and cash flows relating to transactions
between entities of the group (profits or losses resulting from
intragroup transactions that are recognised in assets, such as
inventory and fixed assets, are eliminated in full). Intragroup losses
may indicate an impairment that requires recognition in the
consolidated financial statements.
84
SFRS(I) 10:22
A parent shall present non-controlling interests in the
consolidated statement of financial position within equity,
separately from the equity of the owners of the parent.
85
SFRS(I) 10:B94
An entity shall attribute the profit or loss and each component of other
non-controlling interests. The entity shall also attribute total
non-controlling interests even if this results in the non-controlling
interests having a deficit balance.
86
SFRS(I) 12:12 The interest that non-controlling interests have in
the group’s activities and cash flows
An entity shall disclose for each of its subsidiaries that have

non-controlling interests that are material to the reporting entity:
(a) the name of the subsidiary

(b) the principal place of business (and country of incorporation if
different from the principal place of business) of the subsidiary
Question:ofHow
(c) the proportion do weinterests
ownership know ifheld
it is
bymaterial?
non-controlling
interests
(d) the proportion of voting rights held by non-controlling interests, if
different from the proportion of ownership interests held.
87
SFRS (I) 1-1:7
Information is material if omitting, misstating or obscuring it could
reasonably be expected to influence decisions that the primary users
of general purpose financial statements make on the basis of those
financial statements, which provide financial information about a
specific reporting entity.
Materiality depends on the nature or magnitude of information, or

both. An entity assesses whether information, either individually or in
combination with other information, is material in the context of its
financial statements taken as a whole.
88

(a) the name of the subsidiary

(b) the principal place of business (and country of incorporation if
different from the principal place of business) of the subsidiary
(c) the proportion of ownership interests held by non-controlling
interests
(d) the proportion of voting rights held by non-controlling interests, if
different from the proportion of ownership interests held.
89
90

(e) the profit or loss allocated to non-controlling interests of the

subsidiary during the reporting period
(f) accumulated non-controlling interests of the subsidiary at the
end of the reporting period
(g) summarised financial information about the subsidiary
91
SFRS(I) 12:B10
For each subsidiary that has non-controlling interests that are

material to the reporting entity, an entity shall disclose:
(a) dividends paid to non-controlling interests
(b) summarised financial information about the assets, liabilities,
profit or loss and cash flows of the subsidiary that enables users to
understand the interest that noncontrolling interests have in the
group’s activities and cash flows. That information might include
but is not limited to, for example, current assets, non-current
assets, current liabilities, non-current liabilities, revenue, profit or
loss and total comprehensive income
92
93
SFRS(I) 12:10
An entity shall disclose
information that enables
users of its consolidated
(a) to understand:
(i) the composition
of the group; and
(ii) the interest that
non-controlling
interests have in
the group’s activities
and cash flows
94
SFRS(I) 3:B64
Disclosure for acquisition of subsidiary
The acquirer shall disclose the following information for each business
combination that occurs during the reporting period:
- the name and a description of the acquiree
- the acquisition date
- the percentage of voting equity interests acquired.
- the primary reasons for the business combination and a
description of how the acquirer obtained control of the acquiree
- a qualitative description of the factors that make up the goodwill
recognised
95
SFRS(I) 3:B64
Disclosure for acquisition of subsidiary
The acquirer shall disclose the following information for each business
combination that occurs during the reporting period:
- the acquisition-date fair value of the total consideration
transferred and the acquisition-date fair value of each major
class of consideration
- contingent liability recognised in accordance with paragraph 23
- total amount of goodwill that is expected to be deductible for
tax purposes
- the amount of the non-controlling interest in the acquiree
recognised at the acquisition date
96
97
98
99
Disposal of Subsidiary
100
SFRS (I) 10:B98
If a parent loses control of a subsidiary, it shall:
(a) derecognise:
(i) the assets (including any goodwill) and liabilities of the subsidiary
at their carrying amounts at the date when control is lost; and
(ii) the carrying amount of any non-controlling interests in the former
subsidiary at the date when control is lost (including any components
of other comprehensive income attributable to them).
101
SFRS (I) 10:B98
(b) recognise:
(i) the fair value of the consideration received, if any, from the
transaction, event or circumstances that resulted in the loss of
control;
(ii) if the transaction, event or circumstances that resulted in the
loss of control involves a distribution of shares of the subsidiary to
owners in their capacity as owners, that distribution; and
(iii) any investment retained in the former subsidiary at its fair value
at the date when control is lost.
102
SFRS (I) 10:B98
(c) reclassify to profit or loss, or transfer directly to retained earnings

if required by other SFRS(I)s, the amounts recognised in other
comprehensive income in relation to the subsidiary on the basis
described in paragraph B99.
(d) recognise any resulting difference as a gain or loss in profit or

loss attributable to the parent.
103
Disposal of Subsidiary
104
105
106
107
108
109
Investment in Associate
110
SFRS(I) 1-28 para 3, 5 & 10:
Associate company is an entity over which the investor has significant
influence (>20%)
To use equity method of accounting:

- Initial recognition of investment at cost
- Subsequently, carrying amount is increased or decreased to
recognise the investor’s share of the profit or loss of the investee
after the date of acquisition
- Adjustments to the carrying amount may also be necessary for
changes in the investor’s proportionate interest in the investee
arising from changes in the investee’s other comprehensive income
111
112
SFRS(I) 1-28:10
Distributions
received from
associate reduce
carry amount
SFRS(I) 1-28:32
Goodwill for
associate
SFRS(I) 1-28:23
Disposal of
associate
113
SFRS(I) 1-1:82
In addition to items required by other SFRS(I)s, the profit or loss section
or the statement of profit or loss shall include line items that present the
following amounts for the period:
(c) share of the profit or loss of associates and joint ventures

accounted for using the equity method
114
115
SFRS(I) 1-1:82A
The other comprehensive income section shall present line items for the
amounts for the period of:
(b) the share of the other comprehensive income of associates and

joint ventures accounted for using the equity method, separated into
the share of items that, in accordance with other SFRS(I)s:
(i) will not be reclassified subsequently to profit or loss; and
(ii) will be reclassified subsequently to profit or loss when specific
conditions are met.
116
117
118
SFRS(I) 12:20
An entity shall disclose information that enables users of its financial
statements to evaluate:
(a) the nature, extent and financial effects of its interests in joint
arrangements and associates, including the nature and effects of its
contractual relationship with the other investors with joint control of,
or significant influence over, joint arrangements and associates
(paragraphs 21 and 22); and
(b) the nature of, and changes in, the risks associated with its interests in
joint ventures and associates (paragraph 23).
119
120
SFRS(I) 12:21
For associate that is material to the reporting entity, the entity shall
disclose:
- the name of associate

- the nature of the entity’s relationship with the associate
- the principal place of business of the associate
- the proportion of ownership interest
- measured using equity method or at fair value
- summarised financial information of associate
- if associate is accounted for using the equity method, the fair value of
its investment in the associate, if there is a quoted market price for
the investment
121
SFRS (I) 1-1:7
Materiality concept for associate is the same as the materiality concept
for subsidiary
122
123
SFRS(I) 12:B16
An entity shall disclose
separately the aggregate
amount of its share of
those associates’:
(a) profit or loss from

continuing operations.
(b) post-tax profit or loss
from discontinued
operations.
(c) other comprehensive
income.
(d) total comprehensive
income. 124
Disposal of Associate
125
SFRS (I) 1-28:22
An entity shall discontinue the use of the equity method from the
date when its investment ceases to be an associate or a joint venture as
follows:
(a) If the investment becomes a subsidiary, the entity shall account for
its investment in accordance with SFRS(I) 3 Business Combinations
and SFRS(I) 10.
126
SFRS (I) 1-28:22
(b) If the retained interest in the former associate or joint venture is a

financial asset, the entity shall measure the retained interest at fair
value. The fair value of the retained interest shall be regarded as its
fair value on initial recognition as a financial asset in accordance
with SFRS(I) 9. The entity shall recognise in profit or loss any
difference between:
(i) the fair value of any retained interest and any proceeds from
disposing of a part interest in the associate or joint venture; and
(ii) the carrying amount of the investment at the date the equity
method was discontinued.
127
SFRS (I) 1-28:22
(c) When an entity discontinues the use of the equity method, the entity
shall account for all amounts previously recognised in other
comprehensive income in relation to that investment on the same
basis as would have been required if the investee had directly
disposed of the related assets or liabilities.
128
SFRS (I) 1-28:23
Therefore, if a gain or loss previously recognised in other

comprehensive income by the investee would be reclassified to profit or
loss on the disposal of the related assets or liabilities, the entity
reclassifies the gain or loss from equity to profit or loss (as a
reclassification adjustment) when the equity method is discontinued.
129
130
131
Q&A
132
Thank You
133
References
134
References
Aberdeen. (2020). Annual Report 2019. Retrieved from

https://www.standardlifeaberdeen.com/__data/assets/pdf_file/00
20/51860/Annual-report-and-accounts-2019-FINAL_web.pdf
ASC. (2020, January 1). SFRS(I) 3 Business Combinations.

Retrieved from
https://www.asc.gov.sg/pronouncements/singapore-financial-rep
orting-standards-international/2020-volume
135
References
ASC. (2020, January 1). SFRS(I) 10 Consolidated Financial

Statements. Retrieved from
https://www.asc.gov.sg/pronouncements/singapore-financial-r
eporting-standards-international/2020-volume
ASC. (2020, January 1). SFRS(I) 12 Disclosure of Interests in
Other Entities. Retrieved from
136
References
ASC. (2020, January 1). SFRS(I) 1-1 Presentation of Financial
Statements. Retrieved from
ASC. (2020, January 1). SFRS(I) 1-28 Investments in Associates
and Joint Ventures. Retrieved from
ASC. (2020, January 1). SFRS(I) 1-36 Impairment of Assets.
Retrieved from
137
References
Catalist - Singapore Exchange (SGX). (n.d.). Retrieved September 12,

2020, from https://www.sgx.com/securities/catalist
Changi Airport Group. (2020). Annual Report 2019. Retrieved September
12, 2020, from
https://www.changiairport.com/content/dam/cacorp/publications/Annual
%20Reports/2019/CAG-AR2019-Full.pdf
Companies Act. (2020, September 12). Retrieved September 12, 2020,

from https://sso.agc.gov.sg/Act/CoA1967
138
References
Completion of the disposal of the company's entire equity interest

in its indirect wholly-owned subsidiary, Opus Pictures Limited
Liability Company, and indirect 51.50% subsidiary, UAA Korea
Co., Ltd. (2016, September 14). Retrieved September 12,
2020, from
https://links.sgx.com/FileOpen/SEGL_Completion_of_Disposal
_of_Opus_and%20_UAA_14_Sept_2016.ashx?App=Announc
ement&FileID=421262
DBS Group Holdings Ltd. (2020). Annual Report 2019. Retrieved

September 12, 2020, from
https://www.dbs.com/annualreports/2019/files/media/dbs-annu
al-report-2019.pdf 139
References
Mainboard - Singapore Exchange (SGX). (n.d.). Retrieved September 12,

2020, from https://www.sgx.com/securities/mainboard
Proposed acquisition of 100% equity interest in Greenlight Content Limited.

(2018, October 19). Retrieved September 12, 2020, from
https://links.sgx.com/1.0.0/corporate-announcements/LZUCMQE4PH8M
DLSY/f9e05c78dede2465ac4e36c91e187ba5b68d523847b633588dfdc
31131c13922
140
References
Spackmanentertainmentgroup. (2020, April 15). Annual Report 2019.
Retrieved September 12, 2020, from
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Group%20Limited%20Annual%20Report%202019.ashx?App=An
nouncement&FileID=606683
Spackmanentertainmentgroup. (2017, April 11). Annual Report 2016.

Retrieved September 12, 2020, from
https://links.sgx.com/FileOpen/SEGL_Annual_Report_12_April_2
017.ashx?App=Announcement&FileID=447619
141
References
Starhill Global REIT. (2019). Annual Report FY 2018/19. Retrieved
https://starhillglobalreit.listedcompany.com/newsroom/20191015_180
629_P40U_6F869ASE91CX7G5K.1.pdf
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Purpose Vehicle in Singapore. Retrieved September 12, 2020, from
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304_P40U_E31DFA46C540F1E1482576720041D72A.1.pdf
142
References
The Walt Disney Company. (2020). Annual Report 2019. Retrieved

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-Report.pdf
143
Appendix
144
Mainboard vs Catalist Board on SGX
Mainboard Catalist Board
- Minimum consolidated pre-tax profit - No minimum quantitative criteria required
of at least S$30 million for the latest - 15% of post-invitation share capital in
financial year with operating track public hands
record of at least 3 years - Minimum 200 shareholders
- At least 500 shareholders worldwide - Need to appoint a sponsor (assess
in the case of a secondary listing suitability to list and supervise after listing)
- If SGX and the primary home
exchange do not have an established
framework to facilitate the movement
of shares, at least 500 shareholders
in Singapore or 1,000 shareholders
worldwide
145

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AC3102

Instructor: Dr. James Kwan

1 Jan 20x5 1 Jan 20x7 31 Dec 20x8

Phanpy Ltd (P) Question: Does P have control over M?

Mantine Ltd (M)

SFRS (I) 10:5-18

Question: Is this an upstream or downstream sale?

Downstream sale: Sale by parent to subsidiary

SFRS(I) 10:B86 Consolidated financial statements

On the incurrence of expenses related to the construction

Assume no Fair Value Differential

No entry Dr Contract Assets

Dr Construction in-progress (Yacht) Dr Accounts Receivable

Dr Accounts Payable Dr Cash

On recognition of construction profit for the period

No entry Dr Contract Assets

Assuming that the construction contract concluded in 20x8

Dr Accounts Payable (in P’s books)

(To eliminate progress billing)

Dr Accounts Receivable (in M’s books)

(To eliminate cash collection)

(To eliminate current year profit arising from construction contract)

Dr Beginning Retained Earnings

(To eliminate 20x7’s profit from construction contract)

Question: Given the 4 CJEs explained, if

20x8’s Consolidated JE for Phanpy Ltd Group

Dr Deferred Tax Asset (DTA)

(Tax effect adjustments for CJE 3)

SFRS (I) 10:B94

Question: Are there any adjustments for upstream sale? Why?

Upstream sale: Adjust NCI share in unrealised profit or losses

P owns 75%, NCI owns 25%.

Dr Non-controlling Interests (P/L) $250

Cr Non-controlling Interests (SFP) $250

Combined financial statements of a parent company and its subsidiaries

Presents an aggregated look at the financial position of a parent company

Provides a picture of the overall health of an entire group of companies as

Eliminate the effects Elimination of

Companies associated with each other through the virtue of

SFRS (I) 10:6

SFRS (I) 10:7

SFRS (I) 10:7

The ability to use Exposure, or rights to

SFRS (I) 10:6

SFRS (I) 10:7

SFRS (I) 10:10

SFRS (I) 10 Appendix A

The financial statements of a group in which the assets, liabilities,

SFRS (I) 10:27

SFRS (I) 10:28 (d)

The consolidated financial To show “ownership”, that

Source: DBS Holdings

Shows the group’s

Source: Walt Disney Company Annual Report FY2019

Source: Walt Disney Company Annual Report FY2019

Out of this 70% of NCI, Walt Disney Company holds 30%

Source: Walt Disney Company Annual Report FY2019

Source: Walt Disney Company Annual Report FY2019

Source: Starhill Global REIT Annual

Starhill Global REIT uses SPVs or

Source: Starhill Global REIT Annual Report FY 2018/19

Source: Starhill Global REIT Annual Report FY 2018/19

The SPV is wholly