Nothing disclosed, nothing ventured

Article Abstract:

The growing globalization of market economies has spurred the popularity of joint ventures and other joint arrangements, which are usually sought to gain access to new markets and new technology and to share risks. This development has prompted the Accounting Standards Board to formulate FRS 9, 'Associates and Joint Ventures,' which serves as a guide on how joint ventures and other such arrangements are to be treated. As an updated form of SSAP 1, 'Accounting for Associated Companies,' and FRS 1, 'Cash Flow Statements,' FRS 9 is a clarification on what kind of information an entity must provide regarding its interests in joint ventures and other joint arrangements and their impact on the entity's financial position and performance. The accounting practices prescribed in FRS 9 are effective for financial statements made on or after Jun 23, 1998.

Joint-Venture Management, Practice, Management, Joint ventures

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Consolidated accounts: interpreting the Act

Article Abstract:

The Accounting Standards Board (ASB) issued an interim statement on consolidated accounts in Dec 1990 that amended Statement of Standard Accounting Practices (SSAP) 1, Accounting for Associated Companies; and SSAP 14, Group Accounts. The amendments made SSAP 1 and SSAP 14 consistent with the UK Companies Act 1989. The interim statement, which has the force of an accounting standard, provides guidance in four key areas: the definition of a parent and its subsidiaries, the exclusion of a subsidiary from a consolidated entity, the definition of joint ventures, and the elimination of group transactions. The interim statement restricts itself to matters that are directly related to the application of the Companies Act 1989. In time, the ASB will address other issues dealing with the preparation of consolidated accounts.

Laws, regulations and rules, Great Britain, Consolidated financial statements

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Consolidation - a deceptive simplicity

Article Abstract:

Consolidated financial statements (CFS) present the financial position and results of separate business entities as a single entity. Accountants preparing CFS must decide whether minority interests are internal or external to the group by identifying the companies to be included in the CFS and considering which companies the group controls and which it owns. Minority interest will be either internal of external depending on the issues of ownership versus control and which treatment gives the users of the CFS more relevant information. Adjustments for intra-group transactions should be regarded as internal to the group while share transactions between controlling and minority interests should be considered external to the group.

Methods, Accounting and auditing, Financial statements

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