ACCAF7重点中英对照.doc

ACCA F7 中英语对照
An introduction to Group Accounts
1 Definition of a group
A pany is pany which is controlled by pany.
Per IFRS 10, Consolidated Financial Statements, an investor controls an investee if and only if the investor has all of the following elements:
} Power over the investee, . the investor has the ability to direct the relevant activities
} Exposure, or rights, to variable returns from its involvement with the investee
} The ability to use its power over the investee to affect the amount of the investor's returns
“Power” comes from “rights”, normally voting rights. Therefore, in most instances in the exam, “control” e via owning the majority of the shares in pany.
Be careful in Objective Test Questions. Strictly, the standard doesn’t mention “shareholdings” and so any potential answer which mentions shareholdings is likely to be incorrect.
Group structure
A plc
100% 75%

B Ltd C Ltd
In the above scenario, A plc (“A”) owns 100% of the shares in B Ltd (“B”) and 75% of the shares in C Ltd (“C”). As such, A “controls” both B and C. Where such a relationship exists, we can refer to A as the “parent” or “holding” company and B and C as A’s “subsidiary” companies.
In A’s accounts the investments in B and C will initially be shown at cost (credit cash, debit investments). Subsequently, A can continue to carry the investments at cost. This means that over