Core Activity E - Manage internal and external stakeholders Flashcards
Are there any conflicts in responsibility of departments?
no social media / marketing team which seems to be done by the customer service team.
Operations over see concierges but CS seem to work closely with them?
Whats the difference between a merger and acquisition?
Merger is when two companies join forces to create a new , joint organisation.
Acquisition refers to the takeover of one entity by another
Define the purpose of IFRS 3?
IFRS 3, business combinations - establishes principles and requirements for how an acquirer in a business combination:
- Recognises & measures assets and liabilities in its FS, and any interest held by other parties.
- Recognises and measures the goodwill
- Determines what information should be disclosed to the users of the financial statements.
Which accounting standards are to be used when preparing financial statements for the group?
IFRS 10 - Consolidated financial statements
IFRS 3 - Business combinations
Whats the main difference between IFRS 3 ‘& IFRS 10?
IFRS 3 - Is more about the measurement of the items in the consolidated financial statements. (Measurment)
IFRS 10 - defines control, and sets out specific consolidation procedures.
(Control & Process )
Define the purpose of IFRS 10?
Establishes principles for presenting and preparing consolidated financial statements when an entity controls one or more entities.
- Defines the principle for control
- Sets out how to apply the principle of control
- Sets out the accounting requirements
- Sets out any exceptions for particular subsidiaries
What are the principles of control set out by IFRS 10?
Normally, acquiring more than 50% of a companies ordinary shares gives the investor control via of the investee through the acquisition of more than half of the voting rights. however… IFRS 10 dictates,
The parent must have all of the following ..
- Power over the Investee to direct relevant activities (Appoint, remove or reassign key memebers of the management team)
- Exposure to, or rights, to variable returns from its involvement with the Investee. (Dividends / Interest from debt)
- The ability to use its power to affect those returns. (appoint board members)
What are consolidated financial statements?
Consolidated financial statements are financial statements that present the assets, liabilities, equity, income, expenses and cash flows of a parent and its subsidiaries as those of a single economic entity.
Describe the term for an invidivual or organisation that owns > 50% (51%) of ordinary voting shares?
Majority shareholder
Describe the term for an individual or organisation that owns< 50% (51%) of ordinary voting shares but more than 20%?
Active minority
Describe the term for an individual or organisation that owns < 21% of ordinary voting shares ?
Passive minority
What other conditions are there to take into consideration when preparing group accounts?
- Financial reporting date must be the same
- Uniform accounting policies
- Start date of inclusion is the same date the parent company gains control of the subsidiary.
What types of financial statements does IFRS 10 govern?
P&L
Cash flow
Balance sheet
Changes in equity
What meant by the functional currency?
IAS 21 - Functional currency is the currency of the primary economic environment in which the entity operates.
When might Fx differences occur?
If the rate at initial transaction (invoice date) and the spot rate differ, this can lead to a Fx gain or loss which is presented in the profit and loss.
