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PFRS 12, Disclosure of Interest in Other Entities

This document provides an overview of PFRS 12, which prescribes disclosure requirements for an entity's interests in other entities. It describes the objective of PFRS 12 as requiring disclosures about the nature and risks of an entity's interests in subsidiaries, joint arrangements, associates, and unconsolidated structured entities. The document outlines the types of minimum disclosures required, such as an entity's composition, significant judgments made in determining control or influence, and summarized financial information for material joint arrangements and associates.

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369 views9 pages

PFRS 12, Disclosure of Interest in Other Entities

This document provides an overview of PFRS 12, which prescribes disclosure requirements for an entity's interests in other entities. It describes the objective of PFRS 12 as requiring disclosures about the nature and risks of an entity's interests in subsidiaries, joint arrangements, associates, and unconsolidated structured entities. The document outlines the types of minimum disclosures required, such as an entity's composition, significant judgments made in determining control or influence, and summarized financial information for material joint arrangements and associates.

Uploaded by

julia4razo
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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PFRS 12, Disclosure of Interest in Other Entities

Module 4

Instructor: Mr. Almario G. Parco, Jr., CPA, MBA


Intended Learning Outcomes
• Describe the objective of PFRS 12.
• State the types of investments that are within the scope of PFRS 12.
Objective
• The objective of PFRS 12 is to prescribe the minimum disclosure requirements for an
entity’s interests in other entities, particularly (a) the nature of, and risks associated
with, those interests and (b) the effects of those interests on the entity’s financial
statements.
Interest in another entity
• Interest in another entity – refers to involvement that exposes an entity to variability of
returns from the performance of another entity. It is evidenced by the holding of equity
or debt instruments or other form of involvement, such as the provision of funding,
liquidity support, credit enhancement and guarantees. It includes the means by which an
entity obtains control, joint control, or significant influence over another entity. An
entity does not necessarily have an interest in another entity solely because of a typical
customer-supplier relationship. (PFRS 12.Appendix A)
Scope
• PFRS 12 applies to entities that have an interest in a(an):
• Subsidiary;
• Joint arrangement (i.e., Joint operation or Joint venture);
• Associate; or
• Unconsolidated structured entity.

• PFRS 12 does not apply to an interest in another entity that is accounted for in
accordance with PFRS 9 Financial Instruments.
Minimum disclosures under PFRS 12
• Significant judgments and assumptions in determining the existence of control, joint
control or significant influence over an investee or the type of a joint arrangement.
Minimum disclosures under PFRS 12 –
Cont’n.
• Interests in Subsidiaries
 The composition of the group.
 Name of subsidiary, its principal place of business, and country of incorporation.
 Interests or voting rights held by non-controlling interest (NCI).
 Profit or loss allocated to NCI during the period.
 NCI in net assets as of the end of the period.
 Dividends paid to NCI.
 Summary of the subsidiary’s assets, liabilities, profit or loss and cash flows.

• Significant restrictions on the entity’s ability to access assets and settle liabilities of the
group.
• Changes in ownership interest that result and do not result in a loss of control.
• Any difference in reporting period with the subsidiary.
Minimum disclosures under PFRS 12 –
Cont’n.
• Interests in Joint Arrangements and Associates (that are material)
 Name of the joint arrangement or associate, its principal place of business, and country of
incorporation.
 Nature of relationship.
 Ownership interest.
 Measurement of the investment (i.e., equity method or fair value).
 The fair value of the investment, if the equity method is used and there is a quoted market price
for the investment.
 Dividends received from the joint venture or associate.
 Summarized financial information about the joint venture or associate which includes the
following:
 Current and noncurrent assets and liabilities
 Revenue and profit or loss
 Other comprehensive income and Total comprehensive income
• End of slides

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