Outsourcing

Outsourcing refers to a situation where an entity contracts an outside organisation to perform part of a manufacturing process or another function normally undertaken within the entity. Outsourcing may refer to an entity’s decision to make a particular component in house or to buy that component externally. Typically, however, outsourcing refers to longer term arrangements. …

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Step Acquisitions under IFRS 3

Not all business combinations take place in one go. Sometimes a parent can acquire an entity in stages, which we call a step acquisition. This takes place when an acquirer holds an existing equity interest in the acquiree before the date of control. Say, for example, a company may hold 25% of a company, and then buy out another shareholder taking their share to 55% of the acquiree.

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How to translate the financial statements of a foreign subsidiary under IAS 21

Statement of Financial Position At the end of the financial year, the SOFP of the overseas subsidiary will be translated using the closing rate (i.e. the exchange rate at the date of the balance sheet) For opening net assets, these were translated in last year’s financial statements at last year’s closing rate and must be retranslated for …

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