Comparison between U.S. GAAP and International ... - Grant Thornton
Comparison between U.S. GAAP and International ... - Grant Thornton
Comparison between U.S. GAAP and International ... - Grant Thornton
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<strong>Comparison</strong> <strong>between</strong> U.S. <strong>GAAP</strong> <strong>and</strong> <strong>International</strong> Financial Reporting St<strong>and</strong>ards 107<br />
IFRS<br />
for as equity transactions (IAS 27.30).<br />
U.S. <strong>GAAP</strong><br />
controlling financial interest in the subsidiary as an equity<br />
transaction, without recognition of gain or loss in income.<br />
The guidance for changes in a parent’s ownership interest<br />
in ASC 810-10-45-22 through 45-24 applies to the<br />
following (ASC 810-10-45-21A):<br />
• Transactions that result in an increase in ownership<br />
of a subsidiary<br />
• Transactions that result in a decrease in ownership of<br />
either of the following while the parent keeps a<br />
controlling financial interest in the subsidiary<br />
<br />
A subsidiary that is a business or nonprofit<br />
activity<br />
A subsidiary that is not a business or nonprofit<br />
activity if the transaction is not directly addressed<br />
in other authoritative guidance<br />
The decrease in ownership provisions in ASC 810-10 do<br />
not apply if the transaction resulting in an entity’s<br />
decreased ownership interest is either the sale of insubstance<br />
real estate or the conveyance of oil <strong>and</strong> gas<br />
mineral rights (ASC 810-10-45-21A).<br />
Changes in ownership interest – loss of control<br />
If a parent loses control of a subsidiary, it shall<br />
recognise a gain or loss on the interest sold in profit or<br />
loss. In addition, any retained interest in the former<br />
subsidiary is remeasured at fair value with any gain or<br />
loss recognised in profit or loss (IAS 27.34).<br />
Similar to IFRS, the parent must deconsolidate a<br />
subsidiary as of the date the parent ceases to have a<br />
controlling financial interest in the subsidiary. In a<br />
deconsolidation that is a nonreciprocal transfer to owners,<br />
the former parent should apply the guidance of ASC 845,<br />
Nonmonetary Transactions. Otherwise, the parent must<br />
recognize a gain or loss on the transaction <strong>and</strong> measure<br />
any retained investment in the former subsidiary at<br />
deconsolidation-date fair value.<br />
The deconsolidation guidance in ASC 810-10 applies to<br />
the following (ASC 810-10-40-3A):<br />
• The deconsolidation of a subsidiary or derecognition<br />
of a group of assets if the subsidiary or asset group<br />
constitutes a business or nonprofit activity<br />
• The deconsolidation of a subsidiary or derecognition<br />
of a group of assets that does not constitute a<br />
business or nonprofit activity if the substance of the<br />
transaction is not directly addressed in other<br />
authoritative guidance<br />
The deconsolidation provisions in ASC 810-10 do not<br />
apply if the transaction resulting in an entity’s decreased<br />
ownership interest is either the sale of in-substance real<br />
estate or the conveyance of oil <strong>and</strong> gas mineral rights<br />
(ASC 810-10-40-3A).<br />
IFRS guidance on decreases in ownership of subsidiaries<br />
© 2011 <strong>Grant</strong> <strong>Thornton</strong> LLP<br />
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