illustrative example of disclosure of the nature extent and financial effects of int 611830
Illustrative example of disclosure of the nature, extent and financial effects of interest in joint ventures
Note X – Investments in joint ventures |
|
|
|
20X3 |
20X2 |
|
e000 |
e000 |
F Limited |
4,150 |
4,025 |
G Inc |
3,705 |
3,670 |
Other joint ventures |
300 |
290 |
|
8,155 |
7,984 |
Movement in investment in joint ventures during the year |
20X3 |
20X2 |
|
e000 |
e000 |
Balance at beginning of the year |
7,984 |
7,732 |
Share of total comprehensive income |
290 |
245 |
Dividends received |
(49) |
(57) |
Exchange and other adjustments |
(70) |
64 |
Balance at end of the year |
8,155 |
7,984 |
Analysis of total comprehensive income |
20X3 |
20X2 |
|
e000 |
e000 |
Profit or loss after tax from continuing operations |
|
|
F Limited |
225 |
188 |
G Inc |
34 |
28 |
Other joint ventures |
7 |
11 |
|
266 |
227 |
Other comprehensive income |
|
|
D Limited |
20 |
18 |
E Inc |
2 |
(1) |
Other joint ventures |
2 |
2 |
|
24 |
18 |
Total comprehensive income |
|
|
D Limited |
245 |
205 |
E Inc |
36 |
27 |
Other joint ventures |
9 |
13 |
|
290 |
245 |
All joint ventures are measured using the equity method. All operations are continuing.
The financial statements of all joint ventures have the same reporting date as the group.
F Limited
The Group has a 50% interest in the ownership and voting rights of F Limited, which is held by a subsidiary, K Limited.
F Limited”s principal place of operations and country of incorporation is Mongolia.
The Group is one of two partners in a strategic venture to extract gas reserves from fields in Mongolia. F Limited is a major supplier of gas in Mongolia.
The venture is strategic to the Group”s business given the similarity in business lines.
F Limited is restricted by regulatory requirements from paying dividends greater than 50% of the annual profit.
Dividends of £30,000 (20X2: £40,000) were received from F Limited.
G Inc
The Group has a 35% interest in the ownership and voting rights of G Inc, which is held directly by the parent.
G Inc”s principal place of operations is the USA but is incorporated in Bermuda.
The Group is one of four partners in a venture to operate a gas field in State of New Jersey, which is strategic to the Group”s business given the similarity in business lines.
Dividends of £15,000 (20X2: £15,000) were received from G Inc.
Summarised financial information in respect of F Limited and G Inc is as follows:
The summarised financial information presented is the amounts included in the IFRS financial statements of the joint ventures adjusted for fair value adjustments made at the time of acquisition and for differences in accounting policies. The fair value adjustments in both F Limited and G Inc principally relate to intangible assets which are being amortised over eight years.
All operations are continuing.
A reconciliation of the summarised financial information to the carrying amounts of F Limited and G Inc is as follows:
F Limited |
|
|
|
20X3 |
20X2 |
|
e000 |
e000 |
Group share of 50% of net assets excluding goodwill of €4,850,000 (20X2: €4,600,000) |
2,425 |
2,300 |
Goodwill on acquisition less cumulative impairment |
1,725 |
1,725 |
|
4,150 |
4,025 |
G Inc |
|
|
Group share of 35% of net assets excluding goodwill of €3,310,000 (20X2: €3,212,000) |
1,159 |
1,124 |
Goodwill on acquisition less cumulative impairment |
2,546 |
2,546 |
|
3,705 |
3,670 |
Notes:
1. There is no specific requirement to show the reporting entity”s share of profits/comprehensive income from material joint ventures but we consider that it is necessary to comply with the overall objective of the disclosures
2. IFRS 12 is silent as to whether the disclosed profit figure should be gross or net of tax. We have used ‘net’ in the example.
3. The goodwill disclosed in the summarised financial information is the reporting entity”s goodwill only.